By Diane M. Calabrese / Published September 2018
California and Wyoming rank as the first and fiftieth states, respectively, in terms of population. What unites these two states and four other western states—Washington, Oregon, Idaho, and Montana—is a high level of economic activity.
Fast approaching a population of 40 million, California accounts for 12 percent of the U.S. population. Personal income in the state is 116 percent of the national average. (State economic data here and following are from the Bureau of Economic Analysis [BEA] at the U.S. Department of Commerce.)
The largest industry category in California is finance, insurance, real estate, rental, and leasing, accounting for 21.8 percent of the state’s GDP. It’s also the largest industry class in Idaho (18.1 percent), Montana (18.4 percent), and Washington (17.5 percent). Information is the biggest contributor to GDP growth in California and Washington.
Mining, quarrying, and oil and gas extraction comprise the biggest industry category in Wyoming and account for 20.3 percent of the state’s GDP. Personal income in the state is 113 percent of the national average. Durable goods manufacturing is the largest industry (18.9 percent) in Oregon.
In Idaho, Montana, Washington, and Wyoming, the second largest industry is government. Perhaps that’s surprising given the western states have been romanticized for their history of exploration, timber production, ranching, and farming. Today, the western states are exemplars of the service and information economy.
Climate varies greatly across the western states. It is one factor affecting how industry members serve customers.
Consider the application of stain, says Brian Carter, vice president of Armstrong-Clark Company in Sonora, CA. “California can have a 10-month long working season, and Oregon and Washington can have a three-month long season,” explains Carter.
“In California, being able to be actively applying stain for 10 months out of the year makes it a very good place to do business,” says Carter. One concern about the opportunities is matching them to experts.
“There seems to be a lack of wood restoration professionals, at least in northern California,” says Carter. The absence may be correlated with a tight labor market in the West.
Challenges to serving customers often derive from local trends. “In California people want to see the wood grain and tend to favor transparent stains to semi-transparent stains,” says Carter. “This can be a challenge, in that ‘California sun’ will gray wood faster with semi-transparent coatings.”
Time becomes a challenge north of the Golden State. “For the Pacific Northwest, there is a big push to sell lots of stain in such a short period of time because the season is so short,” says Carter. “From a manufacturing standpoint, we build more inventory to handle the short burst of business.”
“California has almost every type of business you can imagine, from the farmer to the boat builder and everything in between,” says Jim O’Connell, president of Hotsy Pacific in Modesto, CA. “We see different applications for our services every single day. We have supplied equipment for everything from cleaning wine barrels to washing llamas—low pressure, of course—and from killing weeds to digging trenches. I enjoy the diversity of our state that allows us to provide solutions to many different industries.”
Many characteristics of the West would surprise those who have not operated there. “The difference
in the regulations regarding just doing business” are extensive, says O’Connell. There are the requisite business plans required and permits and much more.
“We need a license for every city we do business in,” explains O’Connell. To get the license often demands “rewriting of employee manuals to include specific language from each city,” but it’s just a necessary part of conducting business.
Members of our industry who have not done business in the region would probably also be taken aback by the number of frivolous lawsuits filed each day, says O’Connell. It takes time and money to deal with the filings.
“Our biggest challenge is to make sure we meet or exceed the requirements of the local and state level regulators,” says O’Connell. “For the manufacturer that supplies us, they have to comply with our regulations, which ends up costing them more money to manufacture equipment.”
Uneven enforcement of regulations leads to the complexity of being compliant while competing with other businesses that are not compliant. It hits contractors particularly hard.
“I would say wastewater recovery is the biggest issue facing contractors here,” explains O’Connell. “It is expensive to set up to recover the water they wash with. The ones that do it correctly cannot compete with the contractors who just clean without considering the consequences of where the water ends up.”
O’Connell sees merit in the observation that as goes California, so goes the nation, and it makes him optimistic.
“I see continued water restriction and regulation, which opens the door for waste water recycling and continued water reduction measures,” says O’Connell. “Pressure washers still use less water than other conventional methods (garden hose) of cleaning. I believe our market will continue to grow as regulations catch up with these issues.”
In his state, O’Connell expects increased enforcement to be a catalyst for change. “I see more enforcement due to surplus dollars in the state budget. As our state works through regulatory issues, other states will follow.”
Being ahead of the curve in regulation is a good thing, O’Connell explains. “One prime example is Prop 65, which is now in one form or another in 13 additional states with more to follow. I believe the future is bright, and we will grow and prosper as we find new and exciting applications for our equipment.”
“Contractors in the West are held to higher cleaning reclamation standards than some parts of the country,” says Jerry Meyer, vice president at Ben’s Cleaner Sales Inc. in Seattle, WA. “The days of pressure washing without reclaiming the water or at least good management practices are becoming scarce.”
Uniform enforcement would resolve many issues for contractors. And like O’Connell, Meyer would welcome it.
“I hear lots of horror stories of environmental officials shutting down cleaning contractors on a job or explaining to them how to do it environmentally correctly,” says Meyer. “Sometimes it’s as easy as diverting wash water into grass or flower beds; others require reclaiming the water to dispose of properly. It makes it hard for the contractor who invests in the equipment to do it right, compared to the one who makes no attempt to follow the rules but can charge less for the same job.”
Location favors many in the West with business opportunities that do not ebb and flow across the year. “One of the characteristics that makes selling in Seattle a positive is a moderate climate,” says Meyer. “Because, in general, we do not have extreme highs and lows, we can provide our sales and service all year. A lot of distributors will slow down in the winter because of extreme cold temperatures, but our business can thrive pretty consistently all year.”
Diverse economic activity is also a boon to doing business in the West. “There are many industries to supply,” says O’Connell. “We do not have to depend on just one industry as a source of revenue. So, when one part of the market is not doing well, there are plenty of others as a source of sales or service.”
To illustrate the diversity of economic drivers, Meyer cites the array of settings in which his company sells, and the unique places serving customers has taken him and his company’s team. “We have been to skyscrapers as they are building them, with floors and no walls; the roof of the Seahawks’ football stadium; fish processing ships; tunnels as they are being built; near the top of the Space Needle; deep inside a huge wastewater treatment plant; and many other locations.”
Meyer relishes the opportunity to solve cleaning problems in many different industry spheres. It brings a level of “excitement” to his work, he explains.
Logistics of doing business in the West are somewhat unique, says Meyer. Delivery schedules must factor distance to ensure the company has what it wants when it wants it.
“Most of our manufacturers are in the Midwest, so after manufacturing times, there are still four to five days of freight time,” says Meyer. “In this ‘got-to-have-it-now’ mentality, we try to provide the customer fast delivery. So, we try to get the factories to shorten lead times when possible. We also demand a lot out of our vendors. A lot of our customers want slight to major custom units, which can also slow the delivery down. We work with great vendors that do their best to accommodate us with our delivery needs.”
The fastest growing states are in the West, which maintains its traditional role as a beacon of opportunity. Two conditions that hamper business in the West are a lack of affordable housing and acute competition for employees. For the first 10 months of 2017, Idaho claimed the rank of fastest growing state, but growth slowed, most likely because of a limited pool of employees.
Though the sun rises in the East, it shines brightly, when it comes to pressure washing business opportunities, in the West.