Talking about California's economy on "The Business of Life" radio show

Business consultant and radio personality Ron Tunick recently invited me on as a guest of his show, “The Business of Life” in Ventura, Calif. We discussed that state’s economic challenges and their impact on small business. Tunick offered several thoughts about California (“Our economy is in real trouble”), Idaho (“If I had to go to one place, it’d be Hayden Lake, Idaho. God lives there, am I wrong about that?), and Washington (On Spokane: “You talk about a sleeper city in this country where there’s great opportunity and a great workforce. And, for $250,000, you can buy all the home you want.”)

During the 30 minute interview, topics ranged from the disparity in tax structures and state budget troubles to commute times and air transportation. We touched on business considerations specific to small manufacturers. Tunick offered that California needs to get better business retention efforts, before concluding that under current economic conditions: “If you own a business get out of here get up there” to Washington and Idaho. You can listen to the interview here.

Workforce resouces can be invaluable

An educated, skilled workforce from which to draw is important to companies looking to attract and retain the best talent. Proximity to higher education institutions makes a big difference in the location decision, especially when they are clustered in a desirous area where students can enjoy a lower cost of living. It really becomes advantageous to companies when those colleges and universities work together to produce graduates in high demand fields, such as computer science and engineering, and support small business development through incubator programs. State universities in particular are turning out the best workers and often providing incubator space that is a tremendous asset to entrepreneurs and start-up businesses. Learn more in this interview.

Follow careful process to evaluate relocation options

Relocating a company involves much more than finding affordable, available real estate for a new location. Companies considering relocation have a lot at stake and should take their time making a decision – whether they ultimately stay or move. Ongoing operating costs have to be considered as well as key employee retention. Following a carefully laid out process will produce the best results.

Get to know each other. Spend time getting to know a community and what it has to offer. Companies should expect to be visited a couple dozen times by community representatives as part of the information gathering and diligence process. This allows both sides to determine if it is a good match.

Compare costs. Communities should be upfront about the cost of doing business and willing to compare them against several other locations if necessary. Typical comparisons include basic bottom-line considerations, such as workers compensation, labor costs, utility rates and unemployment insurance.

Consider key employees. Small-to-medium-sized businesses, especially manufacturers, have key employees they need to be successful. Identifying those key employees and involving them in the relocation process is a big issue. Some companies bring key employees on community visits and site tours to gain their input and buy in.

WSJ: State schools turning out best workers

Corporations and site selection consultants consistently rate workforce considerations of high importance in the relocation and expansion decision. Factors such as availability, cost and training programs are always critical to companies evaluating a location.

Jennifer Merritt, career editor at the Wall Street Journal, explained that recruiters value the work readiness of state school students even above the elite private schools. The WSJ asked the nation’s largest employers which schools produced the most academically prepared students with the most relevant training and best ability to succeed and grow with their companies. Recruiters indicated they found state schools produced the best students and were most eager to forge corporate partnerships, according to Merritt.

The six-month WSJ survey reaffirmed the Inland Northwest’s reputation for having a high-quality, available workforce. The newspaper ranked Washington State University graduates among the Top 25 most sought after by corporate recruiters.

WSU was the only Washington school on the WSJ list. The data is based upon 43,000 hires made by public and private corporations, government agencies and nonprofits over the past years in high-demand areas like engineering, consulting and finance.

WSU has strong business, engineering, and science programs, making its students a good fit for those needs. WSU has four campuses, including its main location in Pullman, Wash. and a large branch in Spokane, with 12 colleges, 200 fields of study and more than 100 majors.

Many issues affecting California businesses

In 20-plus years of recruiting companies in California, times have never been worse in that state. Workers compensation costs are skyrocketing again. The state pension fund is not sustainable and in serious trouble. Companies are struggling, especially in the aerospace industry. The situation is really out of control.

That kind of instability is difficult on companies in the best of times. Against the backdrop of broader economic struggles it can be devastating, which has companies considering their options. Watch this interview for more about the California business climate.

VIDEO: Impact of state budget crises on the relocation decision

Companies may not be moving, but they are planning. Businesses often take up to three years to consider locations, evaluate what each has to offer and make a decision. How states handle current budget challenges is being watched closely. The outcomes will prove telling to companies considering another state.

When companies do relocate, they’re going to move to states that can manage their budgets. They will look to minimize future state budget uncertainties. The state of Idaho as an example balanced its budget without a tax increase – and it didn’t take them forever to do it. The state of Washington is getting its budget balanced while looking for tax cuts, so it isn’t going to be a burden for the business community. Companies are going to look for states that can do that. Learn more about relocation decision factors in this interview.

New office and technology campus

Manufacturing and technology companies looking to expand will receive a boost with the conversion of a 250,000-square-foot building in Liberty Lake into a multi-building campus. Full development of the campus will allow up to 700,000 square feet of office and manufacturing uses with up to 4,000 jobs. The existing building includes about 65,000 square feet of upper-level office space that could accommodate a large employer or be divided into smaller office spaces. The main level has approximately 80,000 square feet of space suitable for manufacturing, research and development, distribution or warehouse use.

The 70-acre campus will be known as the Meadowwood Technology Office Park. It will include a mix of owner-occupied and leasable facilities.

VIDEO: Bob Potter discusses Southern California’s business climate

Southern California companies concerned about the state business climate have taken a conservation approach with their capital until the economy improves. While businesses wait, they are watching the state wrestle with questions about how to fund its massive pension fund and balance the budget. The state’s tax structure, regulatory issues, and workers compensation remain ongoing concerns regardless of economic conditions. Learn more about what Southern California companies are saying in this interview.

New aerospace facility to open in fall

Construction has begun on a new Consolidated Aircraft Maintenance and Painting Hanger facility at Spokane International Airport. Associated Painters, Inc. of Everett has signed a 20-year lease for the 41,000-square-foot facility. The hangar bay is designed to accommodate a minimum of two Boeing 737-900 aircraft, with adjoining shops, office and storage space.

The $6.5 million hangar will be the latest addition to Spokane’s healthy and growing aerospace industry. Funding for the facility includes $4 million from CERB, $300,000 from the state’s Economic Development Strategic Reserve Account and $2 million in airport money.

Spokane and the Inland Northwest are home to more than 60 manufacturers, suppliers, distributors, and organizations – 8,100 workers and a $324.8 million payroll – that serve and support the aerospace industry. Aircraft parts and auxiliary equipment manufacturers represent the greatest industry presence in the Inland Northwest, which is also home to companies involved in aircraft manufacturing, maintenance, repair and overhaul.

Leading the national ‘smart grid’ initiative

When the federal government released $45 million to begin work on the country’s largest “smart grid” demonstration project it also underscored the importance of the Inland Northwest clean energy companies. These home-grown innovators are generating solutions in energy efficiency for smart grid applications that will become key components of the Pacific Northwest Smart Grid Demonstration Project.

The $178 million federally designated smart grid demonstration project gets underway in the rolling fields of eastern Washington with a distinctly home-grown feel. The study will involve more than 60,000 metered customers in Idaho, Montana, Oregon, Washington and Wyoming and make Pullman, Wash. the region’s first “Smart City.”

Much of the technology was developed within a 100-mile area that has quietly stepped to the forefront of energy efficiency expertise for smart grid application. Schweitzer Engineering Laboratories, which grew into a worldwide business in Pullman, and Itron, a globally known company headquartered an hour away in Liberty Lake, Wash., are key partners in the demonstration project. Their solutions will be a big part of the devices, software and advanced analytical tools tested by the project.

Other partners include Avista Utilities the city of Pullman, Washington State University, Hewlett Packard and Spirae.

The Lure of Greener Pastures

Last fall, an article ran in the San Gabriel Valley Tribune, "The Lure of Greener Pastures," highlighting the reasons why I believe that companies are leaving California and heading to places like the Inland Northwest to do business. Similar articles ran in the Inland Empire Business Journal, the Pasadena Star New, and the San Fernando Valley Business Journal - all illustrating why the low business costs and high quality of life in Eastern Washington and Northern Idaho are enticing companies to move to our region.

Welcome to Inland Northwest Economic Developments

Welcome to the official blog of the Inland Northwest Economic Alliance! Here we will explore what makes the Inland Northwest (the region spanning northern Idaho and eastern Washington) a great place for business. We will discuss what makes businesses in our region successful – from low business costs to a skilled and committed workforce to a distinctive, affordable quality of life. Along the way we will share stories of businesses that have prospered after relocating here.

The Inland Northwest Economic Alliance (INEA) represents 10 regional economic development agencies covering 14 counties in northern Idaho and eastern Washington. The collaborative effort is aimed at building economic growth by showcasing the Inland Northwest, its communities, and its business value.

My role as the INEA’s chief recruiter is to help identify businesses that can benefit from the advantages of working in the Inland Northwest. I help them determine the bottom-line impact, and assist them through the relocation process. Some might call my approach ‘traditional’ or even ‘old-fashioned’ – but I know one thing. Today, more than ever, business owners are looking for value and every advantage to survive and thrive in this reset economy.

That process has been featured in the book The Potter Principles (Amazon.com and BarnesandNoble.com). The book, authored by Jeni Forman, is a step-by-step guide to the process that helped me successfully bring more than 75 companies to the Inland Northwest. Those companies found business value and opportunities to grow in eastern Washington and northern Idaho.

We look forward to sharing with you what makes the Inland Northwest such a wonderful place to live, work and play.