A Few Words From Greg: Change is inevitable but it never ceases to amaze. Every generation goes through times when it believes something can be better, faster, cheaper, safer or healthier than it is. The folks ahead of that generation seem to ignore the newer generation by quietly going about using things “the old fashioned way” and pleased to enjoy it.

Of course, little thought is needed to realize that older generation that went through the same invention and improvement of things of their predecessors as the new generation is doing now. It must be human nature to seek new and better ways to do things. We will always strive to be better than we are.

The April 2016 issue is taking on an updated look with features intended to make viewing a more comfortable experience and a better read on your mobile device. Scrolling is much improved; we believe the articles and the representation in photos as well as text is an important improvement.

This issue covers a variety of articles that will appeal to every reader. Please take a quick glance down the list on the Table of Contents to see how diverse the articles are while also being important to everyone.

A special “Thank you” is always extended to our contributors of the excellent articles they provide. And appreciation is always extended to our advertisers without whom the Southern Oregon Business Journal would not be possible.

To you, the best of everything,

Greg Henderson, Publishergreg@southernoregonbusiness.com

Southern Oregon Business Journal, 703 Divot Loop, Sutherlin, Oregon 97479www.southernoregonbusiness.com

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Contents April 1st, 2016

featured story

6 Debt, The Double Edged Sword!

features

3 A Snapshot of the Emerging Entrepreneur 9 Digital Economy Agenda

11 Douglas County's Unemployment Rate Drops to 7 .1 Percent13 Survey: Dependability is Top Soft Skill for 3rd Year

14 Housing Wealth Reaches a New Record High

16 Making Clearcuts Less Ugly

17 Marijuana Economy

19 Millennials and Small Town America

21 What is Meant by "Company Culture" and How is it Important to my Business

22 Oregon Coast Economic Indicators

23 Spotlight on Rogue Valley Manufacturing

24 Tax & Business Alert

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A Snapshot of the Emerging Entrepreneur

By Amisha Miller  & Colin Tomkins Bergh - 11/12/15

The Kauffman Foundation interviewed thirty-five EY Entrepreneur Of The Year 2015 winners in the emerging

category from across the country. We would like to thank these high-growth entrepreneurs for helping us understand how they achieved their success in such a short time. From the information gathered in these interviews, over

the next year, the Foundation will create several more briefings and stories on the characteristics of emerging entrepreneurs, which will help entrepreneurs

and those who support them around the country.

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10 Attributes That Surfaced From These

35 Interviews With EY Emerging Entrepreneurs -

companies that are five years or younger with demonstrated rapid growth, who represent a diverse set of sectors. These attributes provide some initial insight

into what makes these successful founders tick.

1. EY emerging companies make a big difference to local employment. New businesses account for nearly all net new job

creation and almost 20 percent of gross job creation in the United States. The EY emerging companies interviewed hire local, young

talent: 37 percent recruit from local universities and 37 percent recruit from their same region; 40 percent recruit recent grads and 20 percent recruit people with little experience. “We have so many great universities here [locally], and so few dominant technology companies, that we have an abundance of graduates from these

programs, which are top-notch programs,” said one entrepreneur.2. EY emerging entrepreneurs are motivated by a love of entrepreneurship. These entrepreneurs are motivated to

start their companies for a wide range of reasons, but the most common is that they love being an entrepreneur (69 percent).

Some love being their own boss, starting a project from scratch, and working on small teams. Other common motivations

include solving a problem that they faced or they saw potential customers facing (49 percent). Others were driven by promising

economic gain (49 percent) or were “pushed” into starting a business:  they lost or disliked their job or thought they could

provide a product or service better on their own.3. Experience is important. Prior research suggests that

founders with previous startup and managerial experience tend to be more successful than those without. This holds true for EY emerging entrepreneurs. A majority of these successful compa-

nies were founded by entrepreneurs with experience—both with running a business (69 percent) and working in their respective

industries (74 percent).4. Cofounders are important for all entrepreneurs, espe-cially first timers. A majority of EY emerging entrepreneurs (63 percent) founded the company with one or more cofounders. Of those who founded the company by themselves, 85 percent were serial entrepreneurs. This suggests that first-time entrepreneurs likely start companies with cofounders to increase their knowl-edge of their industry or how to start their company. Cofound-ers of those surveyed often were people the entrepreneurs knew well—previous colleagues (43 percent) or personal contacts, such as friends and family (38 percent), though we know from other research that these choices have consequences.

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5. Even rapidly growing companies are funded by their founders. Research on Inc. 500 companies found that 59 percent of the companies were financed by the entrepreneurs’ own funds. Findings are similar for EY emerging entrepre-neurs: 52 percent mentioned using a substantial amount of their own money or money from their previous business to start their company, and 31 percent completely financed the company themselves (with zero investors).6. All entrepreneurs face difficulties raising funds. Even some of these highly successful entrepreneurs were turned down for funding, and 80 percent of the entrepreneurs who were turned down were serial entrepreneurs, meaning that even experienced entrepreneurs find it challenging to raise funding. However, the evidence suggests that when most entrepreneurs are able to demonstrate the progress of their company, they attract funding later. Of the entrepreneurs turned down for funding, more than three-quarters eventual-ly were able to access external funding.7. Entrepreneurs tend to give up equity to grow their business. Most EY emerging entrepreneurs use equity to gain funding and attract employees, executives, and cofounders. Aside from their cofounders, entrepreneurs give equity to investors (43 percent) and employees (32 percent). A small number of these emerging entrepreneurs owned 100 percent of their company.8. EY emerging entrepreneurs learn from customers and markets. Though experienced, these entrepreneurs don’t assume they know everything, and they rely on customers or market intelligence to improve products and services. Fif-ty-seven percent of companies have added a new product or service line, and 66 percent changed their product or service due to customer demands. As one entrepreneur stated, “We take a lot of that customer feedback to decide where we’re going to invest.”9. They also learn from mentors. Mentorship often is considered a key to entrepreneurial success. Among this group of seasoned entrepreneurs, only 11 percent said they do not have a mentor. The EY emerging entrepreneurs largely sought knowledge about their market from professionals with deep sector experience (40 percent), or mentoring on leadership and management (37 percent).10. EY emerging entrepreneurs give back too. Half of the entrepreneurs (54 percent) gave back to other entrepreneurs by mentoring, giving presentation advice, or encouraging entrepreneurs to start a business. Interestingly, of those en-trepreneurs who said they didn’t have a mentor, 75 percent of them did not give back in any of the ways mentioned above; those who receive the value of mentoring are more likely to give back. EY emerging entrepreneurs have worked with groups such as Youth Entrepreneur Council, MIT Entrepre-neurial Masters and more. “So I mentor a lot of people—not just in manufacturing but also the startup community” - stat-ed one entrepreneur.

Continue to check www.kauffman.org/emerging for more findings from these interviews over the next year.Haltiwanger, J., Jarmin, R., Miranda, J., “Who Creates Jobs? Small Versus Large Versus Young”

(The Review of Economics and Statistics, 2013), 360.

Gompers, P., Kovner, A., Lerner, J., and Scharfstein, D. “Skill vs. Luck in Entrepreneurship and Venture Capital: Evidence from Serial Entrepreneurs.” (National Bureau of Economic Research, 2006), 7.

Wasserman, Noam. “The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup.” (Princeton University Press, 2013).

Bhide, Amar. “The Origin and Evolution of New Businesses” (The Oxford University Press, 1999.)Eesley, C., Wang, Y., “The Effects of Mentoring in Entrepreneurial Career Choice” (Berkley Fung Institute, 2015), 24.

Related Content

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Debt,The Double Edged Sword!January 2016 Data Update 6:

“In corporate finance, the decision on whether to borrow money, and if so, how much has divided both practitioners and theorists for as long as the question has been debat-ed. Corporate finance, as a discipline, had its beginnings in Merton Miller and Franco Modigliani’s classic paper on the irrelevance of capital structure. Since then, theorists have finessed the model, added real life concerns and come to the unsurprising conclusion that there is no one optimal solu-tion that holds across companies. At the same time, practi-tioners have also diverged, with the more conservative ones (managers and investors) arguing that debt brings more pain than gain and that you should therefore borrow as little as possible, and the most aggressive players positing that you cannot borrow too much.

The Trade off on Debt:

The benefits of debt, for better or worse, are embedded in

the tax code, which in much of the world favors borrowers.

Specifically, a company that borrows money is allowed to de-

duct interest expenses before paying taxes, whereas one that

is equity funded has to pay dividends out of after-tax earn-

ings. This, of course, makes it hypocritical of politicians to

lecture any one on too much debt, but then again, hypocrisy

is par for the course in politics. A secondary benefit of debt is

that it can make managers in mature, cash-rich companies a

little more disciplined in their project choices, since taking

bad projects, when you have debt, creates more pain (for the

managers) than taking that same projects, when you are an

all equity funded company. 6

On the other side of the ledger, debt does come with costs. The first and most obvious one is that it increases the chance of default, as fail-ure to make debt payments can lead to finan-cial distress and bankruptcy. The other is that borrowing money does create the potential for conflict between stockholders (who seek upside) and lenders (who want to avoid down-side), which leads to the latter trying to pro-tect themselves by writing in covenants and/or charging higher interest rates.

Positives of Debt Negatives of Debt1. Tax Benefit: Interest expenses on debt are tax deductible but cash flows to equity are generally not. The implication is that the higher the mar-ginal tax rate, the greater the benefits of debt.

1. Expected Bankruptcy Cost: The expected cost of going bankrupt is a product of the probability of going bankrupt and the cost of going bankrupt. The latter includes both direct and indirect costs. The probability of going bankrupt will be higher in businesses with more volatile earnings and the cost of bankruptcy will also vary across businesses.

2. Added Discipline: Bor-rowing money may force managers to think about the consequences of the investment decisions a little more carefully and reduce bad investments. The greater the separation between managers and stockholders, the greater the benefits of using debt.

2. Agency Costs: Actions that benefit equity investors may hurt lenders. The greater the potential for this conflict of interest, the greater the cost borne by the borrower (as higher interest rates or more covenants). Businesses where lenders can monitor/control how their money is being used can borrow more than businesses where this is difficult to do.

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In the Miller-Modigliani world, which is one without taxes, bankruptcies or agency problems (managers do what’s best for stockholders and equity investors are honest with lenders), debt has no costs and benefits, and is thus irrelevant. In the world that I live in, and I think you do too, where taxes not only exist but often drive big decisions, default is a clear and ever-present danger and conflicts of interests (between managers and stockholders, stockholders and lenders) abound, some companies borrow too much and some borrow too little.”

Aswath Damodaran

I am a Professor of Finance at the Stern School of Business at NYU. I teach classes in corporate finance and valuation, primarily to MBAs, but generally to

anyone who will listen.

Debt’s Two Sides: Riches and Misery

“To a startling degree, the two sidesof debt — its destructive and its beneficial powers — have been responsible for the shifting fortunes of vast numbers of Americans since the turn of the century. Data collected by the Federal Reserve and analyzed in a recent paper by Edward N. Wolff, an economics professor at New York University, makes it clear that many American households of moderate means got much richer, on paper, anyway, from 2001 to 2007, largely because of rising home prices combined with mortgage debt.The data also shows that when the housing market soured, that debt intensified an extraordinarily sharp decline in the household wealth of most Americans from 2007 to 2010. The effects of that shocking decline on the wealth of American households since then — and the proper role of debt in the future — are much less obvious. But important and sometimes counterintuitive lessons about the use and abuse of debt are already emerging from the data.”

NY Times “Business Day” StrategiesBy JEFF SOMMER FEB. 21, 2015

#BuzzWords Make social media work for you.

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Penny PritzkerSecretary of Commerce at

U.S. Department of Commerce

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Digital Economy

Agenda

U.S. unveils Digital Economy Agenda that supports new tech, worker participationMar 11, 2016

Our Digital Economy Agenda: preserving economic growth, opportunity and security for America’s businesses and workers.Our country and the entire world are living through one of the most remarkable economic and societal transformations  in history and it is being driven by technology. In this changing world, economic growth and competitiveness are increasingly tied to the digital economy. This technology revolution has been dramatic.Ten years ago less than 18 percent of the world’s population had access to the Internet. Last year roughly 3 billion people—ap-proximately 43 percent of global population—were online. This is phenomenal growth, and the pace of change is continuing.The digital economy has a staggering impact on U.S. growth and economic opportunity. Consider this fact: In 2014 the United States exported roughly $400 billion in digitally-deliverable services, accounting for more than half of U.S. services exports and about one-sixth of all U.S. goods and services exports. One study recently reported that the Internet economy already represents over 5 percent of U.S. GDP. Additionally, in G-20 developed markets the Internet economy is expected to grow at an annual rate of 8 percent over the next five years, far outpacing just about every traditional economic sector.For many people, the digital economy will be the best place to find their next job or business opportunity. In 2013, 60 percent of unemployed American Internet users ages 15 and older used the Internet to search for a job.

The Commerce Department is committed to ensuring the digital economy continues to

thrive and grow, for everyone.

America’s economic growth and competitiveness depend

on our capacity to embrace digitization in the economy.

Specifically, we have rolled out an agency-wide  Digi-

tal Economy Agenda  that supports the transformative

impact of the Internet and reflects its role as a glob-

al platform for communication, commerce, individ-

ual expression, and innovation. This initiative builds

on the work of the Department’s 12 bureaus and near-

ly 47,000 employees and is focused on four key pillars.

1. A free and open Internet

A free and open global Internet, with minimal barriers to

the flow of data and services across borders, is the linch-

pin of the digital economy’s success. It ena bles workers

and businesses to market their wares, connect with cus-

tomers, and increase their skills. That open Internet is

now threatened by new barriers to cross-border informa-

tion flows, erected by governments and other interests

through data localization rules, platform regulation, and

security policies.

2. Trust and security online

The digital economy cannot succeed if businesses and

consumers do not trust their security and privacy online.

American business needs a framework at home that will

promote global trust, and international rules that do not

unfairly burden American firms.10

3. Access and skillsAmerican businesses need broadband infrastructure and a skilled workforce to compete. Yet broadband deployment remains uneven and more than 25 percent of U.S. households still do not use the Internet from home. American workers will need new skills and tools if they are to share in the prosperity offered by the modern digital economy.

4. Innovation and emerging technologiesThe pace of technological change is only increasing, bringing both opportunity and disruption. Commerce aims to increase its capacity to engage in new technologies, such as autonomous cars and unmanned aircraft, early in the development life cycle to break-down barriers and address long-term policy concerns.While the digital economy offers great opportunity, we face challenges too.Governments around the world are increasingly pursuing policies that could restrict the free flow of information on the Internet.These policies, such as data localization requirements, present significant risks to the competitiveness of both U.S. and for-eign firms globally. The recently announced EU-U.S. Privacy Shield Framework is just the latest example of the importance of digital economy issues. For companies across all sectors of the economy – not just digital economy and Internet compa-nies – effectively addressing these potential regulatory and trade barriers is the kind of export assistance they need the most.To respond to these needs, as the U.S. Government’s primary advocate for business, the Commerce Department has made promoting U.S. digital commercial interests a top priority. So I am pleased to announce today that we are launching a pilot program of ‘Digital Attaches’ in order to ensure that U.S. com-panies can participate in the global digital economy and reach markets worldwide.The primary goals of the Digital Attachés, members of our For-eign Commercial Service of commercial diplomats, will be to provide support and assistance to help U.S. businesses successfully navigate digital policy and regulatory issues in foreign markets and expand exports through global E-commerce channels.This initiative will be led by the Department of Commerce’s In-ternational Trade Administration, working with bureaus across the Department of Commerce, in collaboration with the De-partment of State and our industry stakeholders. This initiative will enhance efforts to advance commercial diplomacy, drive policy advocacy on technology issues, ensure linkages between trade policy and trade promotion efforts, and provide front-line assistance for U.S. small and medium enterprises to take advan-tage of the robust e-commerce channels.The Commerce Department’s commercial service mission is to support American businesses, promote trade, and ensure that all companies have access to a fair and competitive market-place. The Department looks forward to using the new attaché program to partner with the private sector in advancing this mission for the evolving digital economy.

NEWS

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Douglas County’s Unemployment Rate Drops to 7.1 Percent

Douglas County’s seasonally adjusted unemployment rate dropped to 7.1 percent in December from a revised 7.5 percent in November. The rate is 1.4 percentage points below the 8.5 percent recorded in December 2014. This is the lowest seasonally adjusted unemployment rate since February 2000. Oregon’s seasonally adjusted unemploy-ment rate was 5.4 percent and the national rate was 5.0 percent in December.

Seasonally adjusted total nonfarm employment rose by 170 in December. Employment has increased in eight out of the last 12 months, producing a generally upward trend. Douglas County added 610 jobs over the year end-ing in December, for a 1.7 percent annual growth rate. The statewide over-the-year growth rate was 3.1 percent in December.

Not seasonally adjusted total nonfarm employment de-creased by 40 in December. There was a seasonal gain in retail trade (+10) from holiday hiring. There were season-al losses in construction (-60) and leisure and hospital-ity (-40). Elsewhere, there were relatively large gains in manufacturing (+70) and education and health services (+50). There were losses in mining and logging (-10) and financial activities (-10). Government dropped 110 due to losses in local education (-130) and federal government (-30) that were countered by a gain of 50 in noneduca-tion local government.

Over-the-year employment growth occurred in most private-sector industries. The industries contributing the most were manufacturing (+180), professional and business services (+120), and retail trade (+110). The only over-the-year losses in the private sector were in finan-cial activities (-40) and other services (-10).

Government has gained 50 jobs since December 2014 due to gains in federal government (+80), state gov-ernment (+10), and local education (+130) that were countered by losses in local government tribal (-90) and local government excluding education and tribal (-80).

The Oregon Employment Department plans to re-lease the January county and metropolitan area

unemployment rates and employment survey data on Tuesday, March 8 and the statewide

unemployment rate and employment survey data for January on Tuesday, March 1.

For more info visitwww.qualityinfo.org

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Survey: Dependability Is Top Soft Skill For Third YearPR Web - March 9, 2016

Express Employment Professionals recently released new survey results revealing the most important hard and soft skills a job applicant should have. Respondents were asked, "What are the five most important soft skills an applicant should have?"

At the top of the list, for the third year in a row, was "dependability/reliability" at 72%, followed by "motiva-tion" (48%), "verbal communication" (44%), "teamwork" (39%) and "commitment" (39%).

Respondents were also asked, "What are the three most important hard skills an applicant should have?" "Ex-perience" topped the list with 95%, followed by "technical ability" (67%) and "training" (60%). "While we've seen some fluctuation year to year in the skills ranking, it's clear that the best job applicant is one who can show experience and demonstrate dependability," said Bob Funk, CEO of Express, and a former chairman of the Federal Reserve Bank of Kansas City. "After all, if an employer can't depend on you, then nothing else matters."  

willis.cook@expresspros.com

YOUR AD HERE!!

www.SouthernOregonBusiness.com

Need to get the word out? Look no further.

By Rick NewmanMarch 10, 2016

The Housing Bust is Officially Over.

Nine years ago, the total value of housing in the United States hit $25 trillion. Then home values started to plunge, foreclo-sures began to mount and a nasty recession pushed the homeownership rate to the lowest level in 30 years.

The housing bust wiped out about $7 tril-lion worth of ordinary Americans’ net worth—but the damage has finally been repaired. The Federal Reserve says the total value of Americans’ homes hit $25.3 trillion in the fourth quarter of 2015. That’s about $450 billion more than in the prior quar-ter, and a new high. Nine years after home values starting falling in 2006, the sector has finally regained its losses, as this chart shows: 14

Housing Wealth Hits a New Record High

Gary Leif

I SUPPORT:• Term Limits• The Right to Bear Arms• Slashing Red Tape• Mental Health Solutions• Increasing O&C Support• Local Control of Our Lands

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Source: Jared Blikre/Yahoo Finance; Federal ReserveIt took a remarkably long time for housing wealth to get back to break-even. Financial markets recovered much fast-er, with total financial assets peaking at $54.3 trillion in 2007, bottoming out at $45.8 trillion in 2009, and hitting a new high of $55.1 trillion in 2011. Investors recovered all their lost financial wealth in just over four years. Today, total financial assets stand at $66.9 trillion, 23% above the prior peak. That partly reflects the Fed’s aggressive monetary stimulus policies, which pushed up stock values a lot faster than home values.

Housing has been so slow to recover for a number of reasons. The value of homes, like the value of everything, is deter-mined by supply and demand. And demand collapsed during and after the recession, as lending standards tightened and widespread unemployment cut into income and savings. As a debt binge unwound, many consumers found themselves ow-ing far too much to afford a home or qualify for a mortgage. And the foreclosure epidemic left many people with wrecked credit and low odds of owning again any time soon.

Housing isn’t completely back to normal. The  Case-Shill-er national home-price index  is still slightly below its 2006 peak, so while the total net worth of homes is at a new high, the average price of a home is still about 5% below the all-time high, according to the index. That indicates more homes with a higher total value, but a slightly lower average price.

The sales pace of both new and existing homes is still below historical averages, with young buyers waiting far longer to purchase a first home. Part of the problem is a shortage of starter homes, a result of fewer people upgrading from their first home to a larger second one. And median household in-come, adjusted for inflation, is still slightly below where it was in 2000, showing that ordinary families remain under financial stress.

But rising home values and improving net worth are an im-portant part of the solution. As home values increase, owners who might have been under water a few years ago -- owing more than their home was worth -- will rise above the water line and be able to sell without losing money. That will boost the inventory of homes for sale and make room for more first-time buyers. A more stable housing market, in turn, makes the overall economy stronger, banks more willing to lend, and consumers a bit cheerier. It’s about time.

Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on

Twitter: @rickjnewman .

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Over the past several years, OFRI has surveyed Orego-nians on how they view forest management. One con-sistent finding is that people don’t like clearcuts. Discus-sions during focus groups and informal visits indicate the main reason for these feelings is aesthetics: Most people consider clearcuts just plain ugly.Learning about the natural forest cycle, and how clear-cuts mimic natural disturbances such as fire, can help people understand clearcuts. But it still doesn’t help them like them. A better way to combat the negative perception of clearcuts is through visual management – a collection of concepts that help foresters plan timber harvests so they are more aesthetically appealing.

The concepts include:

- Leaving residual patches of trees to visually break up the clearcut.

- Avoiding straight cutting boundaries. Straight lines rarely occur in nature, and the human eye views them as intrusions.

- Limiting the size of clearcuts, so viewers can see where they end. If a clearcut goes to the top of a ridge, the nat-ural visual assumption is that it continues over the ridge top. If people see the boundary, they know where it ends.Designing clearcuts that fit naturally into the landscape and the residual forest.

- Cleaning up slash piles, trash and other debris.

Foresters can implement these visual management con-cepts using modern photo and visualization software that shows how the clearcut will appear from various angles and distances. This is especially useful to see how clearcuts will look from key travel corridors.To help foresters learn these visual management tools, OFRI is co-sponsoring a pair of workshops with the Or-egon Forest Industries Council, Washington Forest Pro-tection Association and the Western Forestry and Con-servation Association. The workshops will be held April 13 in Springfield and April 19 in Grand Mound, Wash.The workshop will include teaching and reviewing vi-sual management concepts and tools developed by Dr. Gordon Bradley, an emeritus professor at the University of Washington. Loren Kellogg, an emeritus professor at Oregon State University, will highlight some operation-al and safety considerations, and OSU professor Doug Maguire will discuss silvicultural considerations. We will also examine a local case study, and I’ll present the OFRI clearcutting survey findings.Registration  for the sessions in open; you can find de-tailed workshop information at the WFCA  website. Please join us and learn what you can do to make our harvest units more socially acceptable.

For the forest,Mike CloughesyDirector of Forestry

503-329-1014cloughesy@ofri.org

Oregon Forest Resources Institute

Making Clearcuts Less Ugly

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Marijuana economy may hit $44 billion by 2020By Daniel Roberts March 14, 2016

In its annual report on the U.S. cannabis industry,Marijuana Busi-ness Daily predicts up to $44 billion in economic impact by 2020. To put that into some corporate context: it's roughly equivalent to the current market cap of Netflix (NFLX) or Caterpillar (CAT). Last year's report predicted $14 billion to $17 billion in impact for 2016. The publication has been producing the report since 2012.The impact figure is separate from sales of marijuana; it represents sales plus all the money pumped into the economy as a direct re-sult of sales. It encompasses everything from wholesale growers to grow-light manufacturers to marijuana accoutrements and everything below it touched by the trickle-down effect of mar-ijuana money. It even extends to home purchases in places like Colorado, which has attracted new residents since legalizing rec-reational use.The marijuana mag assigned the marijuana economy an econom-ic multiplier of 4—that means every dollar spent on marijuana leads to another $3 working its way into the economy.

"We've been expecting rapid growth in the marijuana industry for a while now, and that's exactly what's playing out," says MBD managing editor Chris Walsh. "The main drivers of the growth in recreational sales are Colorado, Washington and Oregon. And also, interestingly, even the mature medical marijuana markets are growing very quickly, like Arizona, New Mexico, and states that have had medical programs for years now. And then you have new medical marijuana states like Illinois, Nevada and Mas-sachusetts." In other words, there's marijuana momentum almost everywhere.As for actual sales of marijuana, that figure is estimated at $3.5 bil-lion to $4.3 billion for this year in just states that have legalized medical and recreational use. That's up from $3 billion to $3.4 bil-lion last year, and in 2014 it was $2 billion to $2.4 billion. The overall sales market for marijuana each year in all states (not just where legalized), in case you wondered: "Between $30 and $45 bil-lion in the U.S., and that includes the black market," Walsh says. For just legal sales, MBD projects $6 billion to $11 billion by 2020.

Of course, the cannabis revolution could be heavily affected by a change in political regime—and federal law still pro-hibits marijuana, which has made it extremely difficult  for marijuana businesses to get bank accounts. But Walsh bets that there's too much momentum now for any one politi-cian to slow it down. "You might get an anti-cannabis pres-ident in January, but even then, it's hard to see this going in the opposite direction," he says. "The genie's out of the bottle, half the country has legalized medical marijuana and an increasing number of states are legalizing recreational. Anyone who tries to stand in its way is going to have a hard time."

Marijuana Business Daily1005 Main Street, #2130

Pawtucket, RI 02860(401) 354-7555 x1

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Millennials & Small Town America

Last night while I was perusing Facebook I came across a post featuring this article, Why Millennials Are Avoiding Small-Town America. It discusses the demographic shift in rural communities.  Data showsthat while the number of Millen-nials (20-34 years olds) is increasing slightly in small towns and rural areas, it cannot compare to their growth in big-city suburbs and lower-density cities. After surveying the popula-tion estimates and examining the trends influencing these shifts, William H. Frey, Senior Fellow at the  Brookings In-stitution writes, “At this point, the prognosis does not look good for much of small town America.”

Writer Brittany Shoot examines the choice many Millennials make to leave their small towns in her piece for The Atlan-tic Citylab, Should Millennials Feel Guilty for Leaving Their Small Towns Behind? She writes:“From my teenage point of view, there seemed to be two choices for young people growing up in Anderson. You could plant yourself, either intentionally or by letting inertia con-trol your fate. (No one else leaves; why would you?) Or you could flee. Early on, I bought into the myth and the language of getting out. Leaving meant making it—it being the pur-suit of some nebulous American Dream-type upward mobil-ity.”She is not alone in her thoughts, if you ask many Millennials why they left their small towns and did not return it is because they felt “trapped” as teenagers in these places and they saw leaving as a component of being seen as successful.

Small towns need Millennials to stay there and/or move to in order to survive. They need to work to make their communities a desirable place for them to live and work. In a poll conducted by theAmerican Plan-ning Association, 74% of Millennials surveyed said that attracting new businesses by investing in schools, transportation options and walkable areas is better than the recruitment of companies.

Planners have highlighted increasing density as a strategy to attract Millennials to small towns. Andrew A. Pack a Community Develop-ment Specialist for the Federal Reserve Bank of St. Louis writes, “As the world continues to become more urbanized, it’s important that small towns keep up with these changes. Increasing a small town’s density to reflect some of the positives of a more urbanized lifestyle may be im-portant to its future success.”As a Millennial living in a small rural community I see why many who grow up here leave for the “big city.” I at times have struggled with living here due to the lack of opportunities and options that are readily available in areas with a larger population. I see attracting people my age to small towns is more than just having jobs for them and being an affordable place to live it is also providing the lifestyle and quality of life that they want. If these communities want to continue into the fu-ture they must get beyond the industrial recruitment economic devel-opment strategy. They must carefully examine the needs and wants of the Millennial generation and take progressive steps in planning their towns to meet these.

“As the world continues to become more urbanized, it’s important that small towns

keep up with these changes."

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I am a University of Nebraska – Lincoln Extension Educator located in John-son County (Tecumseh, NE) with an emphasis in community vitality. My work primarily concentrates on building rural communities that are economically, environmental, and socially sustainable. I particularly have a passion for sus-tainable agriculture and local food systems; and an interest in exploring the social aspects of agriculture production and natural resource management in

rural communities.My formal educational background reflects my interests in agriculture, natural

resources, and public policy.  I received a Bachelor of Science degree from the University of Wyoming where I focused on studying animal agriculture, food

science, and agricultural economics. I also hold a Master of Science degree from Colorado State University in Rangeland Ecosystem Science and a Master of Public Administration degree from the University of Nebraska at Omaha.

What is Meant by “Company Culture” & how is it important to my business?

By Arlene M. Soto CMA, Southwestern SBDC DirectorCompany culture is defined as the shared values, beliefs and practices of company employees including management. This is not the written policies, procedures or strategic plan; it’s the actions and attitudes of each individual who is a part of the organization. Knowing the culture in any business is important to ensure the long term health of the business. Company culture changes as the employees in the business change, as management makes strategic deci-sions and as the business environment fluctuates. Growing businesses often experience culture shifts.

The most successful businesses have an adaptive culture. A study co-sponsored by Crawford International and HR.com in Palo Alto, California in 2006 found that “companies that create adaptive corporate cultures outper-form companies with non-adaptive cultures by a factor of 900 to 1 as measured by long term net income and stock price growth.” An adaptive culture is defined as one that is aligned with the business mission, strategic goals and where employees feel valued.

How can a business owner assess their company culture? Look for common employee behaviors. How do employ-ees act with customers and with each other? Listen with an open mind to employees, suppliers, customers, the media and members of the community. What is being said about the company in public, on social media and in the hallways of the business? What employee actions are rewarded or punished? Are sales growing or shrinking? Is the company environment toxic or healthy?

Once the assessment is completed, the next step is to de-termine what you want the company culture to look like in the future. Review corporate mission, vision, values and goals to make sure the company culture you are inventing is supportive of them. Develop an action plan considering what is working well and what needs to be improved. Brain-storm changes in formal policies and business practices that enhance the desired improvements. Make sure to include employees at all levels of the organization in all levels of planning and making changes. Develop models anticipat-ing changes and communicate with all employees about the expected outcomes. Monitor the results of any changes that are initiated to see if they are impacting the company culture in a positive way.

Company culture cannot be dictated by management, it can only be modeled. Reward behaviors that align with strategic goals. Celebrate accomplishments and communicate regu-larly with all employees about the progress towards reaching the strategic goals of the company and how the employees have contributed to company success. The bottom line; to change the culture of a business the leaders must start acting differently and enlist enough support within the organiza-tion that others act differently as well.

The SBDC is a partnership of the U.S. Small Business Admin-istration, the Oregon Small Business Development Center Network, the Oregon Business Development Department and Southwestern Oregon Community College. Arlene M. Soto has been the Director of the Southwestern Small Busi-ness Development Center since July 2007. To ask a question call 541-756-6445, e-mail asoto@socc.edu, or write 2455 Ma-ple Leaf, North Bend, OR 97459. Additional help is available at the OSBDCN Web page www.bizcenter.org.

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Oregon Coast Economic Indicators

When reviewing the distribution of employment by in-dustry sector, our rural area and the individual counties show a greater percentage of workers counted as being un-der the “government umbrella” than in more urban ar-eas. For example, only 15.4 percent of Multnomah Coun-ty’s covered employment is considered to be government; Lane County is a bit more (17.0%); Curry County’s govern-ment employment makes up 19.4 percent of the total em-ployment; Douglas County’s is one in five (21.8%); and Coos County’s is one in four (25.8%).

Typically, many people do not give much thought as to what services are actually included as being under the um-brella of government. For example, rural areas tend to not have very many private education entities – hence, workers associated with rural schools are counted as local govern-ment employees. Additionally, tribal business activities are also considered to be local government.Twenty-three percent of SW Oregon’s employment is cov-ered by federal, state, and local government. The pie chart shows the area’s government employment distribution by sector. 

For more information contact:Annette Shelton-Tiderman, Southwestern Oregon Work-

force Analyst Oregon Employment Department – Re-search Division | Phone: 541.530.0605 | 

E-mail: Annette.I.SHELTON-TIDERMAN@oregon.govShawna Sykes, Workforce Analyst/Economist - Oregon Employment Department Research Division | Phone:

503.397.4995 ext. 232 | Cell Phone: 503.396.7355 | E-mail: Shawna.L.Sykes@oregon.gov

By Annette Shelton-Tiderman, Southwestern Oregon Workforce Analyst Oregon Employment Department – Research Division

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Spotlight on Rogue Valley Manufacturing: Recovery from Great Recession

Manufacturing jobs are important to most economies. Many manufacturing businesses are considered "trad-ed-sector," meaning that they sell their products out-side the local area and thereby create new wealth for the communities where they are based. Not all local man-ufactured goods are sold or consumed outside the local area. I have personally consumed a few pints – not at one time – of locally manufactured microbrews from local manufacturers such as Caldera or Southern Ore-gon Brewing. But in general, manufacturers rely on ex-porting and selling their products beyond the local areas where they reside. Advanced manufacturing is one of the Rogue Workforce Partnership's – the local workforce investment board – targeted industry sectors. Southern Oregon Regional Economic Development also focuses on retaining and recruiting manufacturing companies as part of their mission to assist traded-sector businesses in the Rogue Valley.

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by Guy Tauer

Another reason that manufacturers garner special treatment is wages can pay higher than average. In Jackson County, the aver-age manufacturing wage per job was $45,320 in 2014, compared with $37,263 for the non-manufacturing average wage. In Jose-phine County, the average wage per job in manufacturing was $38,338 in 2014 while the non-manufacturing wage per job was $32,137.

Manufacturing jobs have been recovering steadily from the Great Recession in the Rogue Valley. In Jackson County, manufactur-ing pre-recession peak employment occurred in summer of 2007, at 7,910 jobs. During the recession, the county lost 1,970 jobs to reach 5,940 in January 2010. Since that time, manufacturing employment rose steadily to reach 7,800 jobs by November 2015. Manufacturing employment in Jackson County has recovered 95 percent of the jobs lost during the most recent recession.

Jackson County has a mix of higher- and lower-paying manufac-turing industries. The most jobs are in fairly high-paying wood products manufacturing, while the second highest number of jobs are in food manufacturing with an average annual wage of $32,624. Jackson County has many jobs in higher-paying chem-ical, transportation, machinery, and computer/electronic prod-ucts manufacturing industries.

The Great Recession also took a toll on Josephine County man-ufacturing jobs, and the recovery has not been as robust. Manu-facturing's payroll employment pre-recession peak occurred in May 2006, when it stood at 3,600. By February 2010, the county lost 1,400 of those jobs as employment dipped to 2,200 in this "goods-producing" industry. Since that time, Josephine County added 780 jobs back in manufacturing. The county has regained 55 percent of the manufacturing jobs lost during the recession. Jo-sephine County's mix of manufacturing jobs explains some of its struggles to regain all of those lost jobs. More of Josephine Coun-ty's manufacturing jobs are tied to the housing and construction industries, which are still not back to their pre-recession levels. Josephine County has substantial employment in wood products and furniture manufacturing. These two industries account for more than 40 percent of Josephine's manufacturing employment. While these two housing-dependent sectors have yet to fully get back to their pre-recession levels employment, this has impacted the overall manufacturing recovery in the county. Computer and electronic product manufacturing is Josephine's highest-paying manufacturing industry, with average wage of $64,328 and more than 200 jobs in second quarter 2015. The overall economy con-tinues to expand and the housing market is tightening in many areas. This should lead to more construction activity and growing demand for Josephine County's manufactured goods, creating more opportunities and jobs going forward.

Tax & Business Alert!WHAT YOU SHOULD KNOW ABOUT CAPITAL GAINS AND LOSSES.When you sell a capital asset, the sale results in a capital gain or loss. A capital asset includes most property you own for personal use (such as your home or car) or own as an investment (such as stocks and bonds). Here are some facts that you should know about capital gains and losses: Gains and Losses. A capital gain or loss is the difference between your basis and the amount you get when you sell an asset. Your basis is usu-ally what you paid for the asset.Net Investment Income Tax (NIIT). You must include all capital gains in your income, and you may be subject to the NIIT. The NIIT ap-plies to certain net investment income of in-dividuals who have income above statutory threshold amounts—$200,000 if you are un-married, $250,000 if you are a married joint-fil-er, or $125,000 if you use married filing separate status. The rate of this tax is 3.8%.

Deductible Losses: You can deduct capital losses on the sale of investment prop-erty. You cannot deduct losses on the sal e of property that you hold for personal use.

Long- and Short-term: Capital gains and losses are either long-term or short-term, depending on how long you held the property. If you held the property for more than one year, your gain or loss is long-term. If you held it one year or less, the gain or loss is short-term.

Net Capital Gain: If your long-term gains are more than your long-term loss-es, the difference between the two is a net long-term capital gain. If your net long-term capital gain is more than your net short-term capital loss, you have a net capital gain.

Tax Rate: The capital gains tax rate, which applies to long-term capital gains, usually depends on your taxable income. For 2015, the capital gains rate is zero to the extent your taxable income (in-cluding long-term capital gains) does not exceed $74,900 for married joint-filing couples ($37,450 for singles). The maxi-mum capital gains rate of 20% applies if your taxable income (including long-term capital gains) is $464,850 or more for married joint-filing couples ($413,200 for singles); otherwise a 15% rate applies. However, a 25% or 28% tax rate can also apply to certain types of long-term capital gains. Short-term capital gains are taxed at ordinary income tax rates.Limit on Losses. If your capital losses are more than your cap-ital gains, you can deduct the difference as a loss on your tax return. This loss is limited to $3,000 per year, or $1,500 if you are married and file a separate return.

Carryover Losses:If your total net capital loss is more than the limit you can deduct, you can carry over the losses you are not able to deduct to next year’s tax return. You will treat those losses as if they happened in that next year.

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