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Opinion

A Skilled Workforce Supports a Vision 2 Succeed

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A Skilled Workforce Supports a Vision 2 Succeed

By San Bernardino County Deputy Executive Officer, Reg Javier 

San Bernardino County, July 17, 2019 — Earlier this year, the San Bernardino County Workforce Development Board released its Labor Market Intelligence, Workforce Roadmap report (https://www.selectsbcounty.com/blog) citing that the County of San Bernardino remains one of the fastest growing economies in California in terms of overall job growth. Moreover, among California’s ten largest counties, San Bernardino County was the second-fastest growing. In fact, the County added more than 130,000 jobs since 2010.

That’s impressive. However, it is important for our County leadership to look at that data through the broader perspective of what it means to the future of the region, as well as how our County can best support the ongoing success of the businesses that choose to invest here as well as the residents that call San Bernardino County home.

While growth is good it can also strain vital resources – the greatest being the ongoing availability and development of a skilled workforce to move business and the economy forward.

The Workforce Roadmap noted this trend as the reason that the County’s economy is expected to grow at a slower rate over the near term as compared to previous years. The report shared that job creation has outpaced the County’s labor force growth every year since 2012, supporting the fact that job growth going forward will be bound by our supply of labor. This lack of labor is a similar challenge for most of the country as unemployment rates remain historically low.

While some slowdown may be inevitable, the data from the Workforce Roadmap is designed to help provide insight into where the County and its partners should invest time and tools to best alleviate workforce shortages as well as how best to target those industries with greatest growth potential.

In the Workforce Roadmap report, manufacturing, healthcare and logistics were cited as the leading growth industries for the County. Since 2010 manufacturing employment in the County has outpaced not just the state but also the entire nation. The County’s healthcare sector is expected to make the largest contribution to job gains in the region over the period of 2018 to 2028. Finally, since mid-2009, the logistics sector has nearly doubled in size in San Bernardino County.

Fully maximizing that business potential, as well as encouraging growth in all industry sectors, requires an ecosystem in which stakeholders work side by side to develop and train a workforce prepared for career opportunities, particularly in these high-growth industries.

San Bernardino County is uniquely positioned to help its residents receive the skills they need to prosper in the 21st century economy. This year the San Bernardino County Board of Supervisors endorsed the Vision2Succeed campaign (http://vision2succeed.org/) to encourage residents and businesses to get involved in learning experiences and programs that help to propel career growth and lifelong learning. Across the County there is a strong system of schools, colleges and universities as well as training and job resource centers that benefit residents and employers.

To that end, the San Bernardino County Workforce Development Board (WDB)(http://wp.sbcounty.gov/workforce/) is a great resource for employers and job seekers in the County. This body of professionals supervises the allocation of federal funding targeted to strengthen the skills of the County’s local workforce. WDB is led by local business owners and includes public partners, educators, labor leadership and community-based organizations. Businesses can benefit from free and low costs programs such as a free human resources hotline, customized training programs and on-the-job training funds, among many others offered through the WDB’s Business Services team.

While these programs are focused on business today, it is WDB’s commitment to plan for the future that is becoming increasingly important and where local business owners can play the most significant role.

Long term County growth resides in the potential of its youth. The WDB and partners recently established GenerationGo! Career Pathways (http://wp.sbcounty.gov/workforce/career-pathways/), a countywide program providing work-based learning opportunities to high school students. This proactive program brings education and business together to ensure that the County’s youth are ready to enter the workforce with the skills needed to compete.

A great example of the application is a partnership with Arrowhead Regional Medical Center. GenerationGo! was piloted at Cajon High School in the city of San Bernardino, with students completing 120 hours of clinical practice at Arrowhead Regional Medical Center. The students were introduced to a variety of career opportunities in the medical field while further propelling them along a valuable career path for college or technical training. The high school seniors were then able to take a state test to gain medical assistant certificates that made them eligible for entry-level work in medical offices and hospitals.

This successful business and education partnership is just one example of how the County is preparing students for a designated high-growth sector and helping them on a pathway to further their training and college and career options. More importantly it is a direct solution to developing the next generation workforce that will help propel the County’s economy forward. When businesses are involved in internships and apprenticeships they are developing their own future workforce and creating certainty in their long-term growth.

To understand the value to the business owner, consider the comments by Arrowhead Regional Medical Center Hospital Director William Gilbert who shared that, “When people think of healthcare careers they often think of nurses and doctors, but this pilot program exposes high school students to the array of career options in medicine. These are good paying jobs with significant upward mobility. It’s rewarding for us to be part of this program to not only educate, but to also help to retain our County’s best and brightest young people.”

The ongoing success of Generation Go! is dependent on business engagement. The County is currently seeking businesses that are willing to provide work-based learning experiences, through internships, as part of a high school curriculum. Interested businesses should email GenGo@wdd.sbcounty.gov for more information.

San Bernardino County has a Vision 2 Succeed. It is an exciting and forward-looking view of success that allows this region to retain its role as a jobs and population growth leader now and for the long term and provide a solid career pathway for youth while giving business a foundation for growth.

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The Inland Empire Business Journal (IEBJ) is the official business news publication of Southern California’s Inland Empire region - covering San Bernardino & Riverside Counties.

Economy

Storm Clouds Forming: Chance of Recession High… It’s Coming, But Not Quite Yet

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Federal Reserve Moves Are Too Little Too Late And Unlikely To Avert A Hard Landing; Labor Force Squeeze Acute In California

The overheated U.S. economy is edging ever closer to a serious contraction, which would bring to an end the over decade-long expansionary period that began after the 2008-09 Great Recession, according to Beacon Economics‘ latest outlook for the United States and California. The $12 trillion injected into the U.S. economy over a two-year period during the pandemic caused wealth in the nation to surge, which drove spending and investment to unsustainable levels. That over stimulus is coming home to roost, we just don’t know when.

“The trillion-dollar questions are when will a recession likely begin and how bad will it be; timing wise, certainly not yet,” said Christopher Thornberg, Founding Partner of Beacon Economics and one of the forecast authors. “Near-term, the economy’s expansion still has momentum, driven by historically high household savings, low private sector debt levels, and the fact that policymakers have yet to truly withdraw stimulus funding.”

The new forecast argues that although U.S. output contracted in the first quarter of the year, it was not driven by weak spending—in fact, final demand in the nation grew at its fastest clip in three quarters. Rather, the contraction was driven by the recent and enormous surge in imports that replaced domestic production—another sign of an overheated economy, not a contracting one.

To date, the tightening actions taken by the Federal Reserve have been tantamount to baby steps and will have minimal impact on demand, and therefore inflation, according to the outlook. “The Fed must do far more, and quickly, before inflation becomes an even more endemic problem,” says Thornberg. “They need to get serious about shrinking their balance sheet, and Congress needs to focus on balancing the U.S. budget. Unfortunately, this is unlikely on both fronts because public sentiment suggests we are on the edge of a cliff—and no policymaker wants to be the pusher.”

Indeed, the surge in public panic over the economy is liable to prevent the Fed and Congress from doing what they need to do to cool things off, meaning the problems associated with an overheating economy will grow worse, and when a recession does arrive it will be more severe than if the issue had been tackled quickly and assertively, according to the forecast.

Key Findings:

  • Despite some headlines, the pandemic-driven recession is undoubtedly over. With a 3.6% unemployment rate, record low inventories, and the highest pace of industrial production ever it’s clearly evident that the U.S economy is currently operating at full capacity.
  • The nation’s unit money supply (M2 relative to the size of the nominal economy) has never been higher, which suggests the United States will see even more inflation unless something is done to shrink the money supply back to size.
  • Net worth among the bottom 50% of earners increased 90% in the last two years, although wealth inequality in the nation remains far too high. At the same time, Americans paid off a great deal of debt or refinanced mortgages at ultra-low rates. The debt burden on U.S. households is much lower than it’s ever been – a good thing when a recession hits.
  • Supply chain problems are showing in the form of labor shortages. The great retirement that occurred over the course of the pandemic saw almost 3 million U.S. workers drop out of the labor force. Now there are a record 11 million job openings and demand for workers is causing wages to rise at their fastest pace in 30 years.
  • One of the most worrisome trends is the U.S. trade deficit, which, as of the first quarter of this year, is running at 5% of GDP, another way of saying the nation is consuming 5% more than it is producing. The United States “borrowed” a net $300 billion from the rest of the world in the first quarter alone to fuel this excess consumption.
  • Many of California’s regions now have lower unemployment rates than they did pre-pandemic. This includes all of the state’s major employment centers across southern, northern, and inland California.
  • California’s labor market recovery has been stronger in the inland parts of the state, due in large part to the heavy presence of the Logistics sector. Employment in this sector is now 18% higher than pre-pandemic, fueled by the continued and accelerated transition to online consumption.
  • California’s labor force – defined as the number of people either employed or seeking employment – is still 1.5% below pre-pandemic levels. But the squeeze is tighter in some regions: The Inland Empire, Sacramento, San Diego, and San Jose have completely recovered, while Ventura, Los Angeles, and San Francisco have the largest workforce deficits. “As is clear to anyone who visits a restaurant or retail store in many parts of California, where “now hiring” signs are abundant, the state is currently experiencing an acute labor shortage,” said Taner Osman, Research Manager at Beacon Economics and one of the forecast authors.
  • In the first quarter of 2022, home prices in California averaged $685,000, an increase of 13% on a year-over-year basis. That price is close to double the median price in the nation (note that price growth is cooling).

View the new The Beacon Outlook here. This press release is available digitally here.

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Opinion

Supply Chain Delays and Strains to Continue through 2022

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OPINION

By Hema Dey, IEBJ Content Contributor

Managing Price Increases

From the start of the pandemic in 2020, businesses have been absorbing ongoing shocks that impacted operations and the bottom line. The supply chain delays and strains everybody hoped would resolve in 2021 seem set to continue through 2022; while the backlog of ships waiting for berths at the ports of Los Angeles and Long Beach fell to a low of 43 mid-March, experts expect a new surge of goods shipped from Asia after the Lunar New Year to drive those numbers up again. After that, the situation is unclear—the latest lockdowns in Shenzhen threaten to cut off supplies of parts and products when U.S. businesses are already starved from ongoing shortages.

At the same time, the war in Ukraine and sanctions on Russian oil are driving already-high fuel prices even higher around the world. While experts disagree on whether we can expect gas prices to keep climbing or that they’re near their peak, it’s clear significant relief is unlikely soon. That additional expense is unwelcome news for businesses of all kinds.

Knowing the current difficulties will be part of the landscape for the foreseeable future has brought many companies to the unavoidable conclusion that they have to raise their prices to stay in business. If you’ve delayed making changes in the hope that things would pass, you’re certainly not alone—but if you’re coming to the realization that you can’t wait to adjust your prices to reality anymore, then you’re not alone there either.

The Right Way to Handle Raising Prices

When raising your prices is a necessity, how you approach it can make a significant impact on minimizing any negative fallout. Your customers are naturally not going to be happy about seeing their costs go up. Anticipating such dissatisfaction is one reason why businesses put off making price adjustments much longer than they should. However, postponing the inevitable can harm your business and won’t change the factors that make an increase necessary. Here’s what you should be doing to manage price increases wisely.

The first thing to remember is that price increases don’t happen in a vacuum. Beyond simply considering the pressures on your business in terms of your growing costs, you need to know what your competitors are doing, and you need to find out fast. If your proposed price increases are wildly out of line with what the rest of your competition is doing, you could easily lose market share. We can assist in getting an up-to-date view on the moves your competitors are making to help you factor in this critical angle.

Next, you shouldn’t delay price increases, but you should also keep them realistic. Deferring the inevitable will weaken your business’s financial position and increase the pressure to put even higher prices in place when you finally do act. At the same time, you must keep in mind that your customers are almost certainly experiencing the effects of increased fuel costs and higher shipping rates just like you are. When clients feel like a business is taking advantage of a general atmosphere of inflation to boost their own profits at the expense of their customer base, they’re rarely quiet about it. Stick to doing what you have to do to keep your business healthy, and don’t be tempted to pad it.

Finally, this is absolutely the time to revisit your marketing strategy. When prices go up, buyer behavior changes. Review all your keyword searches to understand how these fluctuations may be affecting traffic to your website. Repositioning your business accordingly can help avoid unexpected hits to your sales and leads, and may even lead to new opportunities. 

Seeking Guidance

Trying to adjust to the current economic challenges can feel overwhelming for business owners. You don’t have to go it alone when you’re contemplating significant changes like raising your prices—calling in an expert consultant can give you confidence that you’re taking the right steps for the long-term good of your company and your customers. If you need benchmarking assistance, contact Iffel International here. We can help you take the right steps down a difficult road.

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Banking & Financial Services

Q&A Session with Black Cooperative Investment Fund Executive Director—Kaine Nicholas

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Q&A with Kaine Nicholas, Executive Director of Black Cooperative Investment Fund

By Josaline Cuesta, Small Business Majority, Senior California Program Manager, and IEBJ Contributor

Why is financial literacy important for small business owners? What are the pillars of financial literacy?

Financial literacy is the comfort level one may have with topics related to money and its management. Financial literacy is critical to success, and it’s where everything begins for small business owners.  

At the beginning of a business venture, an entrepreneur can be cash-challenged and relatively inexperienced in practical business versus theory. It is important that while learning the business terrain, entrepreneurs have at the very least, a baseline of financial literacy to question documents and do calculations or have support to negotiate effective business terms. Any terms that are negotiated at the beginning of a venture can significantly affect the projections or the valuation of a business. These effects can vary widely, depending on the comfort level of financial literacy. 

The pillars of financial literacy are banking, budgeting, saving, credit, debt, and investing. What matters most to small business owners is budgeting, banking, and credit, and we recommend focusing on that order for small business owners. Understanding the numbers, having the assets with banking partners that can offer solutions, and building business and personal credit are all imperative to small business owners. BCIF and its trusted partner, AmPac Business Capital can help everyone gain a firm awareness of these pillars.

What’s needed to create a strong financial plan?

What is needed to make a strong financial plan is the actions that happen alongside writing the actual financial plan. While one may be uncertain of the “hockey stick” or optimistic revenue, what people can control is the cost. Know those costs and how they change in a good, better, or best scenario to keep you prepared.  

No one likes surprises. There is security and comfort in knowing that costs are consistent and predictable. Spend time conducting the research and use due diligence so that you and the financial partners understand the financial plan and financial statements. 

What’s in a business plan, and why is having one essential for a small business owner? 

A business plan is a document that, at its most basic level, can help small business owners navigate the who, what, where, why, and how to generate income with a product or service. The business plan tells the reader that this “document” is your prototype on paper. The business plan also helps readers understand the basic valuation of your business. 

If your business plan is on paper, does it articulate the vision, or is it a requirement for a loan program? The business plan is important because it represents as the creator of the business. Thinking business out on paper can reduce mistakes in real-world execution.  

What’s the best way to document and share major changes to a business plan with your financial advisor and employees, such as becoming a corporation or expanding to another state? 

Ensure the establishment of company meetings and hold them routinely, preferably with quarterly updates. This allows stakeholders to receive firm-wide public information and establishes communication between leadership, management, and employees. 

What are some tips for thinking strategically about cash flow?  

One tip is to understand what is in the pipeline and/or accounts receivables and monitor subscriber trends to your products or solutions. When I ask business owners how their business is doing, they usually respond with, “it’s going well.”  And I always ask myself, what does that really mean, and is the owner aware of the items that support healthy cash flow?

Is a personal credit score relevant to small business success? What defines a “good credit score” and how can you maintain one?

Personal credit is relevant to businesses at the earlier stages of a business. If used correctly, one should leverage good credit and create business credit as soon as possible. Personal credit and business credit are created differently and operate differently. That difference can be critical to accessing capital. Unfortunately, a “good credit score” is not universal. We recommend owners investigate the potential creditor by asking what numerical score and credit history on the credit report will produce a favorable outcome. A credit score and credit report are two components that contribute to a sizable credit decision. With that information, the small business owners have a credit “road map.” What is most important is that the business owner is proactive in the credit conversation. One can maintain and learn more with one of BCIF’s trusted partners, AmPac Business Capital.  

What are the top three easy-to-navigate business loans for a startup business? Do the types of loans that are needed change in your 2nd or 3rd year of business?

The top and the easiest loan is a zero-interest loan based on an alternative way of evaluating personal credit and traditional risk models. If one can find a small business loan that targets a certain demographic or type of business, that should be extremely helpful. Third, look for a small business loan that can be forgiven. 

The types of loans that could change in your second or third year of business can be tricky. Business success and loan/funding gaps require careful consideration, but most important, predictability. 

How will I know that a financial literacy resource is proven and credible?

Financial literacy is a journey. One way to affirm credibility is to compare it to your financial situation. Always have a backup resource for validation.

How can the average entrepreneur improve their financial literacy?

This is an important and critical question that I will answer in an alternative, more direct way. I strongly recommend these three words as ways to improve personal and business financial literacy:

  • Curiosity
  • Humility
  • Discipline

Start with opening your mail and being curious about the words that you do not understand in your statements. Call the service number and ask the person to explain what these words mean regarding your account. It sounds simple, but it truly is a free lesson that benefits your personal or professional situation. The information is memorable because the asker is learning even when configuring the question. (Do not forget your tax person or accountant.   They are your resources).

Humility helps your behavior when you ask a question, and you partially know the answer, but you ask questions to attain mastery.  

Lastly, you must be disciplined and determined when you call the service line or account representative when you do not fully understand a financial term. Do not feel like you are wasting their time asking basic questions. If they have chosen to do business, service your needs, or hold your money, you are only using your mutual rights within the relationship. 

What is the best way to stay abreast of COVID relief funds and resources in the Inland Empire area?

Contact the Black Cooperative Investment Fund (BCIF) at www.bcifund.org, 310-904-6336, reach out to our partner, AmPac Business Capital at www.ampac.com, or visit Venturize: https://venturize.org/—Small Business Majority’s free online resource hub for small business owners who need help accessing tools and resources to grow their businesses.

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