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Wednesday, 04 April 2012 09:40

MEDC seeks expansion of economic gardening program

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MEDC seeks expansion of economic gardening program PHOTO: Aaron Eckels
GRAND RAPIDS — Michigan needs to do less hunting and more gardening when it comes to economic development.

That was a key message delivered at a March 20 event in Grand Rapids that spotlighted a Michigan Economic Development Corp. pilot program aimed at helping grow second-stage companies in the state. The event also included an impromptu announcement by an MEDC official that the organization plans to significantly expand the program, even though the pilot is still underway.

Since the formation of the MEDC in 1999, the state’s economic development approach focused on luring companies to locate or expand in Michigan, but it didn’t do much to support smaller, growing companies. That changed with the Snyder administration and its push for economic gardening, which focuses on providing resources to second-stage companies, defined as those businesses with 10 to 99 employees and $1 million to $50 million in sales.

In November, the MEDC launched a pilot of Pure Michigan Business Connect, a program that pairs CEOs at second-stage companies with consultants from the Cassopolis, Mich.-based Edward Lowe Foundation. The CEOs receive support in one or more of four areas:

  • Strategy and management.
  • Market research/competitive intelligence.
  • Internet and social media strategy.
  • Geographical information systems to help identify potential customers in other states.

The Grand Rapids event, sponsored by the Small Business Association of Michigan and Crain’s Detroit Business, highlighted resources available to second-stage companies, as told through the experiences of two entrepreneurs who have gone through the Business Connect program. MiBiz was the media sponsor of the event.

The Business Connect program provided each CEO with 35 hours of consulting and then delivered a report with information identified by the team as opportunities for the executive to grow his or her business.

Loch McCabe, president of Shepherd Advisors, one of the Pure Michigan Business Connect service team members, said the program works because it gives growing second-stage companies access to high level resources that would be more in line with the in-house capabilities at third-stage and fourth-stage companies.

Bonnie Alfonso, president and chief embellishment officer at Alfie Logo Gear for Work and Play in Traverse City, agreed.

“I have no IT department. I have no market research. To be able to bring in professional (assistance) is critical to my growth,” Alfonso said of her 22-year-old, 19-person business. “I have to focus on the things for tomorrow and not just the things for right now, and that can be hard.”

Alfonso worked with the Business Connect team to identify a “prospect list” of other areas in the Midwest to target for growth and to improve her company’s website search engine optimization.

“I could go to a website developer and tell them to make (our website) better — with this,” she said, referring to the data in the report the Business Connect team presented to her.

Because Alfonso had two specific needs she wanted the team to address, she said she was able to put to best use the program’s 35 hours of in-person “extended staffing.”

One obstacle the state program may have to overcome, however, is that entrepreneurs and second-stage companies likely don’t think of the MEDC as the first place to turn for resources.

“For entrepreneurs, the last thing they’re going to do is call Lansing,” said Yan Ness, CEO of Online Tech Inc. 
The Ann Arbor-based data center service provider participated in the Business Connect program to gain insight on geographical areas where it could expand its reach, Ness said.

“The 35 hours is going to be worth way more than what the 35 hours cost the company,” he said. “But you need to know what you want.”

The Pure Michigan Business Connect program had 108 nominees from economic development representatives across the state when the program was launched in November. According to statements from the MEDC at the time, the 54 participating companies were chosen based on the type and size of the markets they served, their growth potential and their likelihood of benefitting from the service.

To date, 16 companies have completed the program, and eight have to be contacted, said Nicole Whitehead, the MEDC project manager for the program. The remaining participants are expected to “graduate” by the end of April, she said.

But with the end of the pilot project in sight, the business community and the state are faced with a “now what” moment, said Rob Fowler, president and CEO of the Small Business Association of Michigan.

“There is no next entry point, at least not yet, but that’s all on the drawing board,” Fowler said.

While the pilot program is closed to new participants, Whitehead announced at the event that the organization had issued a request for proposals to expand the state’s economic gardening program beyond the pilot.

Whitehead said the MEDC hopes to serve 200 companies a year via the expanded program.

The MEDC on March 19 issued an RFP to run a statewide business-to-business economic gardening service branded as Pure Michigan Business Connect to “directly assist second-stage growth companies.” The MEDC seeks vendors with “existing programmatic techniques and methodologies” to help the state’s second-stage growth companies and that have “proven and successful track records” in serving that segment of the business community, the RFP states. Proposals are due April 13.

Despite not having completed the pilot project, Whitehead told MiBiz the MEDC has received “very positive” feedback from the 16 companies that have graduated. Only one company provided negative feedback, she said. The advice the companies provided so far is being used to tweak the pilot program as it is being implemented, she said.

“We didn’t want there to be a lag between the pilot and the (next phase of the program),” Whitehead said.

“We put out an RFP to find an organization that can bring this to the state of Michigan as a whole,” Whitehead said during a question and answer session at the event. “We want to make this a bigger and better program.”

Currently, the Business Connect program uses members of the national economic gardening team trained by the Edward Lowe Foundation. Whitehead said the pilot project RFP attracted responses from many organizations saying they had experience with second stage companies. The RFP for the statewide roll out of the program aims to “compare those philosophies,” Whitehead said.

Read 2124 times Last modified on Sunday, 12 August 2012 09:54

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