Welcome to Berntson Porter’s blog for clients and friends in the distribution and manufacturing industries. It is our intent to share knowledge that will help you in your business.

The Skilled Trade Dilemma Facing Manufacturers: A Shortage of Job Candidates

Over the next two decades, nearly two million skilled trade jobs will go unfilled, yet more than 30% of high school graduates are not going to college. So why are manufacturers facing such a need for skilled entry-level employees? The answer may lie in the stigma surrounding so called “blue collar” jobs.

According to recent surveys, only about one-third of parents would encourage their child to pursue a career in the trades, with most citing low wages and high turnover as the reasons. However, according to Anthony Carnevale, Director of the Georgetown University Center on Education and the Workforce, approximately 20% of certified skilled tradesmen and 30% of Associate Degree holders will make more money throughout their careers than those with Bachelor Degrees. Furthermore, jobs requiring trade skills are expected to increase almost as much as professional technical jobs in Washington state over the next 10 years!

But what good is having these jobs open if there is no one to fill them? According to Washington’s Office of the Superintendent for Public Instruction (OSPI), the unemployment rate of people ages 16-25 has nearly doubled in the last few years, leading to manufacturing companies crying out for entry-level employees while millennials are simply crying for a paycheck.

What can be done to fix this employment disparity? A renewed focus on career and technical training programs in high schools and beyond can help, as well as encouragement by educators and parents for  recent graduates to pursue careers in skilled trades. For more analysis on the local manufacturing environment, check out the results of our 2017 BP Pulse | A Distribution and Manufacturing Survey, where experts weigh in workforce issues.

The good news is that our state has more than 30 technical and/or trade schools offering certifications or degrees varying from commercial and industrial maintenance, to welding and machining, at a fraction of the time and financial cost of a traditional college or university. These programs can be a great resource for companies looking to fill an employment gap. For more information on local trade programs, view the resources linked below.

Click HERE for a list of schools graduating students with the skills your company needs.

http://www.trade-schools.net/trades/machine-technologies.asp

http://www.sbctc.edu/our-colleges/explore-colleges/default.aspx

http://www.deseretnews.com/article/865641859/Why-bluecollar-jobs-prevent-some-students-from-seeking-highvalue-career-paths-in-college.html

http://www.thesimpledollar.com/why-you-should-consider-trade-school-instead-of-college/

http://www.theatlantic.com/education/archive/2016/01/where-are-all-the-high-school-grads-going/423285/

Stay In The Know With Our BP Report!

In our latest BP Report, you’ll get an edge on what’s happening in the distribution and manufacturing industries with a sneak peak of our first annual BP Pulse survey results!

And there’s more: Read about our newest service group:Berntson Porter Corporate Advisory, LLC, providing business sale and acquisition assistance to business owners. Plus check out our in-depth interview of new President, Mary Actor, and CEO Bob Berntson. Get the full issue here: BP Report.

Get a Pulse on the Distribution & Manufacturing Industry With the Results of our BP Pulse Survey

It’s finally here!  The results of our first annual BP Pulse: A Distribution and Manufacturing Survey have been published!  In our business, we often field questions from clients, referral sources and industry professionals who are curious about the state of the industry, specifically in our local area.  Although we have great insight from our client base, we wanted to take this project a step further and gain insight on the challenges and opportunities that additional companies in our area are facing.  In partnership with CAMPS (Center for Advanced Manufacturing Puget Sound), we targeted over 600 Puget Sound area distribution and manufacturing professionals.  We received comprehensive insight on a field of 30 questions from owners, presidents and management level employees from a variety of Puget Sound companies.

Months of hard work from select members of BP’s Distribution and Manufacturing Practice Group have culminated in this comprehensive publication.  I’m encouraged by the results, which show overall that local companies are expecting growth – both in terms of revenue and number of employees for 2017.

Contact information for our industry specialists can be found in the publication.  Please don’t hesitate to reach out to us with questions or comments on the findings.  We’d love to chat more about the results and provide more insight than what we could fit into 12 pages!  Additionally, if someone you know would find this data helpful, please share our results with them!  Visit Berntson Porter’s website to get a copy of the publication.

Reshoring Set to Take Center Stage with President Trump Now in the White House

Now that President Trump has moved into the White House, there are many areas that he is looking to make his mark, including reshoring. Reshoring has been a buzz word in the manufacturing industry for years now but appears finally to be gaining some ground as Americans, including the President, look to keep companies manufacturing their products here as well as incentivize companies to move their manufacturing facilities back to the United States. While the President has made it one of his missions to bring back manufacturing jobs to the United States, many manufacturing companies are already looking to move their operations back to the U.S. for two reasons. First, the wage gap between workers in the United States and overseas countries have narrowed, especially in China. Even though workers in the United States are still paid more than their Chinese counterparts, this disparity is not as large as it once was. With companies considering their entire manufacturing costs, many are seeing the benefits of manufacturing their products here. Second, manufacturers are able to control the supply chain better in the United States and manage any defects in products without the large lead times that overseas manufacturers face. This leads to better quality products and happier customers. No matter what we see from our lawmakers in Washington and the Trump Administration on this issue, companies are already seeing the benefits of bringing their manufacturing back to the United States. Berntson Porter will continue to monitor any new developments on reshoring.

Self-Driving Cars Pick Up Speed

For several years now Google has been known for their self-driving cars. Self-driving cars are able to brake, steer, change lanes and navigate without any human intervention. According to Industry Week, Google’s self-driving cars have autonomously driven over 1 million miles. While there have been some instances where humans have had to take over to prevent a crash, it has not deterred other car manufacturers, such as BMW, Tesla, Audi and several other auto manufacturers, from creating their own self-driving car.

In 2016 Uber began to test self-driving cars in Pittsburgh and Arizona. Uber retrofitted Fords and Volvos with self-driving capabilities and invited select loyal customers to ride in their self-driving car. The test ride allows for two passengers with a driver and engineer sitting in the front seat to ensure there are no problems.

Automakers have big plans for self-driving cars in 2017. Ford and Volvo will begin to test their cars in overseas markets, such as Europe, Sweden, and China. In addition, GM plans to begin conducting tests in snowy weather to ensure self-driving cars are able to handle any driving conditions. Tesla has already begun installing hardware that improves the Autopilot’s capabilities in current cars and plans to have a self-driving car drive itself from Los Angeles to New York by the end of 2017.

To speed up the introduction of automated vehicles into the market, the federal government pledged $4 billion dollars over 10 years to the Self-Driving Car Initiative. This initiative will fund the research and testing of self-driving cars. In addition, the initiative aims to improve the U.S. transportation system and vehicle-to-vehicle communication which will help cars avoid obstacles through better awareness of the surrounding environment. As metropolitan areas grow, the use of self-driving cars will reduce traffic congestion and improve road safety. To learn more about how self-driving cars work check out the video below.

Link to video:

https://waymo.com/tech/

Other sources:

http://www.businessinsider.com/self-driving-car-milestones-coming-in-2017-2017-1/#7-perhaps-the-biggest-milestone-to-prepare-for-in-2017-will-be-when-a-self-driving-tesla-drives-itself-from-los-angeles-to-new-york-7

http://www.businessinsider.com/uber-driverless-car-in-pittsburgh-review-photos-2016-9/#but-if-youre-getting-a-ride-in-pittsburgh-it-will-be-in-the-first-edition-ford-fusion-i-mean-just-take-a-minute-to-look-at-all-of-them-7

 

2016 Financial Toolkit Can Pave the Path for 2017

January is the perfect time to look back on your prior year financials with a toolkit designed to provide insight and direction for your business as you start the new year.

Ask yourself: What story is your firm’s data trying to tell you?  Have you wondered how your company might compare to the rest of your industry?

With all of the financial data you deal with as a business owner, it is often easy to miss the forest for the trees.  That’s why at Berntson Porter we’ve developed a toolkit to help you take a step back and look at the bigger picture of your manufacturing and/or distribution operations.

Our toolkit is designed to analyze your financial data and convert it into actionable results and information that can help you manage your business.  This toolkit has several features, including:

  • Key financial ratios that you may not yet be considering,
  • Historical trends to aid you in visualizing the patterns your business may be following,
  • Comparisons to industry benchmarks, which aid in understanding your business compared to your competition.

In addition, your representative can help walk you through the results, provide guidance on the various financial ratios, and share insight on how to address certain trends or benchmarks that could give your business a new, competitive edge.

If you have any questions about our financial toolkit or would like assistance in analyzing your data and comparing your company against industry benchmarks, we are here to help!  Contact your Berntson Porter representative at 425.454.7990.

 

 

Add Year-End Planning to Your Holiday Checklist

With 2016 coming to a close, there a few things you can do that could improve your company’s financial statement and tax position going into the New Year. A few key considerations include making sure inventory is properly counted and valued. There are certain tax advantages to disposing of obsolete inventory that must be capitalized on before year-end. In addition, companies with average gross receipts over $10 million over the prior 3 years can be subject to Section 236A tax rules which require certain overhead costs to be capitalized for inventory purposes. By planning ahead you can reduce the impact or defer recognition for another year.  It is also a good time to review debt agreements to ensure financial covenants are met in order to address any potential problems early on. These are just a few year-end planning tips, for the full checklist read the full article, Year-End Planning Considerations for Distributors and Manufacturers: A Checklist of Best Practices, in our Fall BP Report.

The R&D Tax Credit: Two Exciting New Provisions for “Start-ups” and “Pass-throughs”

The Research and Development (R&D) tax credit applies to the research and creation of new technologies, products and processes or the improvement of those already in existence. Congress added two new exciting provisions for start-ups and small businesses specifically through the PATH Act of 2015. Need a better understanding of the R&D Credit before learning about the new provisions? Check out our previous post.

Offset of Payroll Taxes:

Great news for start-ups! The R&D credit, beginning in tax year 2016, can be used as a credit against FICA taxes for businesses which have $5 million or less in gross receipts and have no income tax to use the credit against. The maximum credit is capped at $250,000 per year for five years. There are further rules concerning what companies qualify as a start-up and they should consult with their CPA or tax advisor before attempting to use the offset.

Offset to AMT (Alternative Minimum Tax):

Pass-through entity owners can also celebrate. The R&D Credit, which will often flow through to the owners of qualifying small businesses, may use the credit to offset Alternative Minimum Tax (AMT) starting in 2016. The definition of a small business currently stands as a business with average gross receipts for the previous three years of less than $50 million. Many owners of growing and successful pass-through entities have not been able to utilize the R&D credit due to being subject to AMT. In the past, AMT disallowed certain credits and deductions (including the R&D credit) on the owners’ personal tax returns, but this will no longer be the case for 2016 and beyond.

Knowledge of the rules now provides ample opportunity to make decisions that can reduce taxes owed in 2016 and beyond. Start-ups and pass-through entities can utilize these provisions to save tax money on R&D expenditures.

If you have questions about the R&D credit, call Berntson Porter at 425.454.7990 to speak to a tax professional. We’re here to help!

Last Chance! Participate in the BP Pulse and Get Insight Into Distributing & Manufacturing in the PNW

In an effort to better serve our clients and friends in the distribution and manufacturing industries, we are excited to announce the launch of our first-annual BP Pulse: A Distribution and Manufacturing Survey.Berntson Porter has partnered with the Center for Advanced Manufacturing Puget Sound (CAMPS) to provide valuable insight into the Pacific Northwest economy and distribution and manufacturing industries.  If you are in distribution and/or manufacturing, we would love to hear from you.

The survey is now open and will run through November 9, 2016.  Once we’ve gathered the responses, we will publish the resulting data to provide you with additional perspectives about the current economic status of distribution and manufacturing – direct from your peers in the industries.  Our hope is that these results provide you with information that can help you plan for your business and upcoming opportunities.

If you would like more information about the 2016 BP Pulse, contact Amy Ellisor, Marketing Manager, at 425.454.7990 or aellisor@bpcpa.com.  Alternatively, start participating in the survey, www.surveymonkey.com/r/MfgDistSurvey, and have your voice heard.

An advance copy of the results will be provided to all participants.

Just for participating, all survey-takers will be entered into a drawing for one of five fabulous gift cards to major retailers, including Best Buy, Macy’s, Lowe’s and Target!

The BP Pulse: A Distribution & Manufacturing Survey

In an effort to better serve our clients and friends in the distribution and manufacturing industries, we are excited to announce the launch of our first-annual BP Pulse: A Distribution and Manufacturing Survey.

Berntson Porter has partnered with the Center for Advanced Manufacturing Puget Sound (CAMPS) to provide valuable insight into the Pacific Northwest economy and distribution and manufacturing industries.  If you are in distribution and/or manufacturing, we would love to hear from you.

The survey is now open and will run through November 9, 2016.  Once we’ve gathered the responses, we will publish the resulting data to provide you with additional perspectives about the current economic status of distribution and manufacturing – direct from your peers in the industries.  Our hope is that these results provide you with information that can help you plan for your business and upcoming opportunities.

If you would like more information about the 2016 BP Pulse, contact Amy Ellisor, Marketing Manager, at 425.454.7990 or aellisor@bpcpa.com.  Alternatively, start participating in the survey, www.surveymonkey.com/r/MfgDistSurvey, and have your voice heard.

An advance copy of the results will be provided to all participants.

Just for participating, all survey-takers will be entered into a drawing for one of five fabulous gift cards to major retailers, including Best Buy, Macy’s, Lowe’s and Target!