By Scott Witt, Senior Relationship Manager, Commercial Banking, WaFd Bank and Dan Drouault, owner of Covington Engineering
Lower cost of living. Less congestion. Access to nature. Work-life balance. Friendly people. Better quality of life. If you have ever asked a recent Idaho transplant why they moved to our state, some of these may sound familiar. The Treasure Valley has become a powerful engine for growth in recent years. Realtor.com ranked Boise the No. 1 real estate market in the U.S. in 2020, and Inc. Magazine’s Surge Cities List, which ranked the top 50 U.S. cities with the most significant entrepreneurial growth, landed Boise in the top 5 (just above San Francisco).
At this point, making a case that our region is an attractive place to live and work is a bit like preaching to the choir. But new residents need more than an appreciation of place to ensure a successful relocation – particularly those who are moving a business into the Gem State.
For businesses, making a move requires considerable thought and planning, whether that move is to expand operations into a neighboring region or involves pulling up stakes to fully relocate elsewhere. Some lessons can be learned from owners and operators who have traveled the road, such as Dan Drouault, owner and president of Covington Engineering.
From Gold Rush to Gem State: The long road to Idaho
In early 2020, Drouault packed up his 172-year-old lapidary equipment manufacturer and moved the company from its home in Redlands, California, to set up shop in Meridian.
The seeds for relocating were planted 15 years ago, when Drouault purchased Covington Engineering several years into his employment with the company. “Even then, I knew we wouldn’t be able to survive much longer in California.” Covington Engineering produces tools and accessories to cut and polish rocks. “Lapidary equipment is a niche market, and most of what we sell, we ship worldwide,” explains Drouault.
Given the geographic dispersion of his customers, Drouault had the luxury of selecting a new location based on qualities that he and his employees valued, such as a lower cost of living and doing business. He took every travel opportunity to scope out potential new sites for his small business.
A trip to Coeur d’Alene three years prior to the company’s move put plans in motion. “Once I visited Idaho, I fell in love with it,” recounts Drouault. The Treasure Valley came up as a potential location, given its proximity to shipping hub Salt Lake City. From there, it took three years to navigate the entire process – from selling its California building to taking possession of a space in Meridian.
Tips on business relocation
While settling into Covington Engineering’s Meridian location, Drouault became acquainted with Scott Witt, a Senior Relationship Manager in Commercial Banking at neighboring WaFd Bank. “WaFd Bank is directly across the street, and Scott came over to say hello,” Drouault recalls. “He and the staff struck me as good people, and I felt really comfortable working with them.”
“In talking with Dan, we learned that he wasn’t happy with his financing through his bank back in California,” said Witt. “We were able to refinance his building for a better rate, and we’ve been working together ever since.”
“It’s worked out to be a really great relationship,” added Drouault. Having a personal relationship with a banker in his new hometown has been beneficial. With Witt and WaFd Bank, Drouault has more insight to the nuances of conducting business in Meridian as well as opportunities to expand his network and become part of the business community.
Drouault and Witt have also learned a great deal from each other about relocating a business and pass along their learnings:
1. Plan, Plan, Plan
“The best advice I can tell anyone: Plan,” says Drouault. “It took three years to get organized. There is so much involved and you still need to take care of your day-to-day business.” Drouault notes that planning involves having good people around to provide support. In his case, his general manager and office manager helped navigate through the many details involved.
With meticulous planning, Drouault was able to overcome hurdles. The logistics of moving heavy machinery, stock and supplies was his biggest challenge. Costs from moving companies were prohibitive, so his company coordinated the move, hauling two or three truckloads of equipment per week for several weeks. Additionally, the pandemic created an unexpected challenge, somewhat slowing the shop’s ability to get up and running. It has also prompted him to approach hiring conservatively, adding staff only when long-term retention appears likely.
2. Conduct Deep Research
Both Witt and Drouault cite the importance of conducting due diligence before relocating. Witt advises, “Do your research on codes and regulations before moving, as it will make your transition a lot smoother. And make sure to figure out rates for unemployment costs, utilities, income tax, property tax, etc., before you move.” Drouault agrees, recalling that the local utilities in Idaho were instrumental in providing detailed cost comparisons that underscored the potential financial benefits.
Drouault also spent considerable time ensuring that the Treasure Valley would ensure the quality of life his employees desired. The quality of schools, availability and cost of housing, safe neighborhoods, as well as other perks of life in Idaho contributed to drawing a dozen of his 19 employees with him. “I felt good being able to provide my employees a better quality of life out here,” he says.
3. Connect with Local Experts
Witt suggests that relocating businesses engage with experts in their new area. “Enlist a CPA and an attorney who understand the legal rules and nuances that will apply to your business.” Business registration rules, for instance, differ by state and may even impact the name of a company. Also, local chambers of commerce or economic development organizations can offer networking opportunities.
Connecting with a local banker prior to a move can also help. “This is so important,” says Witt, “as they can help you right away.” Beyond helping with financial concerns, bankers tend to know a broad range of service providers and professionals, so they are well positioned to provide new business owners and operators with introductions, referrals and a network of support.
4. Be a Good New Neighbor
As Drouault learned from his research, certain regulations in California were stricter than in Idaho, which required him to invest in equipment and systems that would reduce Covington Engineering’s environmental impact. “We are a green company,” he shares. “In California, we were recycling all metal chips and using an air scrubber for plasma. We’re still doing that, and more, in Idaho. Not because we have to, but because we want to take care of this beautiful place.”
Being a good neighbor is something that Witt can relate to, as it is part of WaFd Bank’s DNA. Valuing community and small business are how Witt came to be indispensable to Drouault and Covington Engineering. “I remember thinking he was a really nice guy,” Witt says of Drouault, “and I wanted to help him out and welcome him.”
Making the right move
For Drouault, planning and perseverance paid off. His business has found its stride and has added more staff, while longtime employees have improved their quality of life. According to Drouault, the move was “totally worth every penny.”
For Witt, seeing Covington Engineering settle in is gratifying. He and WaFd Bank remain committed to supporting businesses in the region and throughout the bank’s footprint, no matter which stage they are in.
If your business is expanding to new markets or considering a major relocation, or if you are interested in learning about WaFd Bank’s commercial banking products and services, visit www.wafdbank.com/commercial-banking.
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