Home Grown Start-Up Business Aims to Help CT Grow

“Simply redeveloping economic development.”  That’s how the leadership of Help Grow CT, a fledgling business dedicated to helping other start-up entrepreneurial enterprises, describe their endeavor.  As a playful video summarizes the serious intent driving the effort, “Several years ago, a group of entrepreneurs utterly frustrated with the bad press their beloved state was receiving, just couldn’t accept Connecticut as being one of the worst places to do business in the country.” Christopher Sacchinelli and a handful of colleagues quietly began the venture a few years ago, having spent some time at a Norwalk accelerator program and with a track-record in business start-ups.  They tweaked and revised their business model and platforms, traveling and researching economic development strategies that have been successful elsewhere, and why. About 50 businesses signed on, and helped refine the effort. 

Six months ago they began a public push to grow the business and this month a new member platform is being launched. The immediate goal is 3,000 small business owners, about one percent of businesses in Connecticut.  The company is about one-third of the way there.

“We knew that there had to be a way we could catalyze change via our own actions,” Sacchinelli said, recalling the drive to start Help Grow CT. “The goal is to help and empower Connecticut businesses.  To make it cheaper and easier to grow a business.”

In surveying the new business landscape, it became clear to Sacchinelli that “the problem that most small business owners were experiencing was high costs, not enough time and low profits.”   What they did as a result was develop a business that provides opportunities for new businesses to band together to succeed as individual enterprises, and by doing so, “help grow CT.”  It is an endeavor that aims to bring other businesses together as a group to drive economies of scale, reduce costs, increase efficiencies and grow profits.  And in doing so, boost Connecticut’s economy and turn around the state’s less-than-stellar reputation.

“The number one business killer is lack of action.  We focus on solutions,” said Sacchinelli, a Trumbull resident and lifelong entrepreneur born and raised in Norwalk who turned 27 this month.  “Connecticut is my community.  I’m vested in Connecticut.”  A previous venture landed him on the cover of the Fairfield County Business Journal in 2013, soon after graduating college. He has authored a book to encourage young entrepreneurs like himself, and has endeavored to use his expertise to encourage and guide businesses and potential business owners in his home state.

Through Help Grow CT, member companies are able to save up to 30 percent on dozens of exclusives partners, apps and platforms, and participating businesses are said to achieve, on average, 9 percent annual growth.  Individuals, called Growth Analysts, work with businesses to navigate through their specific business needs.

By offering savings on back room operations, such as bookkeeping, Help Grow CT not only allows business start-ups to focus more on their business product or service and less on the paperwork, without sacrificing the important detail that can lead a new enterprise to sink or swim.  They point out that businesses with healthy ledgers are 76 percent more likely to succeed over a 5 year period.

“HelpGrowCT has helped small business owners identify areas in their business where they can cut costs, invest in inefficiencies and grow their profitability,” the company’s website points out, offering support in branding, social marketing, and growth strategy development, responding to what is often new business owners “feeling overwhelmed” as they navigate all that is necessary to propel a new endeavor forward.  “We work with the nitty gritty that can hold a business back,” adds Sacchinelli.

Thus far, the initiative has been self-funded.  As members, who will pay monthly fees for the service, are added, Sacchinelli hopes the venture will be self-sustaining, and ultimately, profitable.  The number of members will largely determine that.  He is also cognizant of the potential social impact of the venture, and aims for it to be a “sustainable, evergreen accelerator program,” that will also deliver value to existing businesses.

In addition to the resources provided directly by Help CT Grow to member businesses, “we can listen to problems and crowd source solutions,” Sacchinelli explains, bringing the power of the network of members to bear on individual business challenges.  “The vast majority of small businesses have some of the same problems.  Together, we can guide a business toward the solution.”  He was encouraged recently by the positive feedback (and new members) from among attendees at the Connecticut Business Expo in Hartford, where he raised the profile of HelpGrowCT with the first visible foray into central Connecticut.

HelpGrowCT is also interested in the opinions of Connecticut's business community as their own business evolves.  A companion website, www.helpgrowct.org, includes a brief online survey for start-ups, business owners, investors, residents and students, aimed at propelling the venture and giving voice to the state's growing entrepreneurial community.   And HelpGrowCT continues to seek talent as it grows, actively seeking "energetic, self-driven community leaders who share our passion" and can apply their skills in journalism, event planning, advisory services, or community advocacy," according to the website.

Never too far from the surface is the drive to turn around Connecticut’s reputation as inhospitable to new businesses.  Says Sacchinelli, “After reading article after article about how Connecticut is a poor place to do business, we’re trying to build something that matters.”

https://youtu.be/tPIrcx3oEz8

https://youtu.be/xnac_ll-5I4

CT Ranked #41 in Climate for Small Business and Entrepreneurship

Connecticut ranks #41 in its policy environment for small businesses and entrepreneurship, according to a study that ranked the 50 states in a Small Business Policy Index.  Most of the New England states landed towards the bottom of the list, with none ranking in the top 25. The report, Small Business Policy Index 2014: Ranking the States on Policy Measures and Costs Impacting Small Business and Entrepreneurship, tracks 42 measures with 33 of them pertaining to taxes and regulations. Issued by the Small Business & Entrepreneurship Council, the index ranks the 50 states according to 42 different policy measures, including a wide array of tax, regulatory and government spending measurements. The index, which has been published annually for 19 years, continues to point to South Dakota as the most entrepreneurial-friendly state in the U.S., benefiting most from the lack of individual income tax, capital gains tax, corporate income tax and inheritance tax.

The top 10 states are South Dakota, Nevada, Texas, Wyoming, Florida, Washington, Alabama, Indiana, Colorado and North Dakota.  Among the New England states, the highest ranked was New Hampshire at #27, followed by Massachusetts at #31, Rhode Island at #40, Connecticut at #41, Maine at #42 and Vermont at #45.

Commenting on Connecticut, the report indicates that “Connecticut’s entrepreneurs, businesses, investors and workers benefit from a low crime rate and low consumption-based taxes. However, the state’s negatives are numerous, including high personal income, individual capital gains, corporate income, corporate capital gains, property, gas and diesel taxes, along with high levels of government spending and debt.”

Connecticut’s ranking was unchanged from last year’s Index report.  In 2012 the state ranked #42 and in 2011 was ranked at #44.  In 2010, Connecticut ranked at #41, which was a drop from #40 in 2009.

“States like Arizona, Indiana, Kansas, New Mexico, North Carolina, North Dakota, and Ohio have really stepped up their game on the policy front. In each of these cases, tax reform and relief were undertaken, which reduces the costs of risk taking and doing business. Meanwhile, top-tier policy states like Texas, Nevada, South Dakota, Florida and Wyoming continue to leverage their long-standing policy advantage, and are doing things to get better,” said SBE Council President and CEO Karen Kerrigan.

Of the 42 measures included in the recently issued 2014 edition of the Index, 24 are taxes or tax related, 9 relate to regulations, five deal with government spending and debt issues, with the rest gauging the effectiveness of various important government undertakings, according to the report. The lowest ranked states were New York, New Jersey and California.

The report states that “most business owners understand the array of costs and burdens imposed by government. Taxes and regulations, for example, drain enterprises of vital resources, distort decision-making, and redirect resources and energies away from maintaining, improving and/or expanding a business.”

In the individual measures, among Connecticut’s highest rankings were #7 in crime rate, #10 “State and Local Sales, Gross Receipts and Excise Taxes as a Share of Personal Income,” #13 in the rankings of “Adjusted Unemployment Taxes,” and #17 in workers compensation costs.

The Small Business and Entrepreneurship Council (SBE Council) is a 501c(4) advocacy, research, education and networking organization dedicated to protecting small business and promoting entrepreneurship.  SBE Council works to educate elected officials, policymakers, business leaders and the public about key policies that enable business start-up and growth. The report, issued in December, was authored by Raymond J. Keating, chief economist for the Small Business & Entrepreneurship Council.

Connecticut's Small Business Friendliness Grade Drops to "D"

A new survey of small business friendliness in the nation’s states has dropped Connecticut’s overall grade from D+ to D, and given the state a failing grade in seven of eleven small business friendliness categories.  The grades dropped as compared with last year's survey. Thumbtack.com, in partnership with the Ewing Marion Kauffman Foundation, released the third annual Small Business Friendliness Survey showing that small business owners in Utah, Idaho, Texas, Virginia and Louisiana gave their states the highest rating for friendliness to small business. In contrast, small business owners gave California, Rhode Island and Illinois an "F," while New Jersey joined Connecticut in earning a "D" grade.

More than 12,000 entrepreneurs nationwide participated in this year's survey - the largest of its kind and  the only survey to obtain data from an extensive, nationwide sample of small business owners to determine the most business-friendly locations.

The survey ranked states on specific categories, including: the ease of starting a business, ease of hiring, state and local business regulations, health & safety regulations, employment, labor & hiring regulations, tax code and tax-related regulations, licensing forms, requirements and fees, environmental regulations, zoning and land use regulations, and the availability of training & network programs for small business owners.

Connecticut received a B in two categories: ease of hiring and training & network programs, and a D in one: ease of starting a business. In all other categories, Connecticut received an F for small business friendliness.

Some of the key findings for Connecticut, according to the survey of small business owners:

• Connecticut received a D for its friendliness towards small business, one of the worst grades in the country.
• Connecticut received the worst grade in the nation for its regulatory friendliness.
• The state rated in last place for its health and safety, licensing, environmental regulations, and zoning laws.
• Small businesses in Connecticut had the second worst outlook for the national economy of any state.
• Female entrepreneurs in Connecticut rated the friendliness of their state government 9 percent higher than their male counterparts.

In last year’s survey, Connecticut did not receive a single grade of “F.” The state’s overall grade was D+, and included an A in training & networking,  B in ease of hiring, and  B- in health & safety regulations. Other grades were D+, C- and C. In the first survey conducted, in 2012, Connecticut’s overall grade was D, and the state was not graded F any category.

"Creating a business climate that is welcoming to small, dynamic businesses is more important than ever, but rarely does anyone ask small business owners themselves about what makes for a pro-entrepreneur environment," says Jon Lieber, chief economist of Thumbtack.com. "Thousands of small business owners across the country told us that the keys to a pro-growth environment are ease of compliance with tax and regulatory systems and helpful training programs."

Some of the survey's key findings include:

• Small businesses in Texas, Utah and Idaho have rated their states in the top five every year this survey has run, while California and Rhode Island have been rated in the bottom five every year.
• The friendliness of professional licensing requirements was the most important regulatory issue in determining a state's overall friendliness to small businesses. Closely following licensing requirements was the ease of filing taxes.
• Once again, tax rates were a less important factor than the ease of regulatory compliance in determining the overall friendliness score of a jurisdiction. Two-thirds of respondents said they paid their "fair share" of taxes – that is, they felt like they were neither under-paying nor over-paying.
• Small business owners who were aware of training programs offered by their government were significantly more likely to say their government was friendly to small business than those who weren't.

Small Business Friendliness in CT Improved to D+ in 2013, Data Shows

Connecticut’s small business climate is improving – slowly.  That’s according to the 2013 Small Business Friendliness Survey by Thumbtack.com, in partnership with the Ewing Marion Kauffman Foundation, which ranked the state #35 for overall small business friendliness.

The 2013 study draws upon data from over 7,000 small business owners nationwide and shows that Connecticut improved its overall grade slightly, rising from a 'D' in 2012 to a 'D+' in this year's study.

Although the state struggled overall, the study authors reported, it received high marks in several categories. Some of the key findings for Connecticut include:

Connecticut earned an 'A' for the state's small business training and networking programs, which ranked among the top-5 nationally. Business owners were critical of Connecticut's regulatory systems, giving the state a 'C' in this category, although this was an improvement from the 'D+' grade received last year.

Among its neighbors, Connecticut ranked just behind New York (which had trailed Connecticut in last year's study) and Massachusetts, but ahead of Rhode Island for overall small business-friendliness.

The state’s overall grades, and comparison with last year, in the 11 categories compared in the survey:

D+         Overall friendliness (D last year)

D+         Ease of starting a business  (C last year)

B            Ease of hiring (C last year)

C             Regulations  (D+ last year)

B-            Health & Safety  (C+ last year)

C-            Employment, labor & hiring  (D+ last year)

C-            Tax code (D last year)

C             Licensing  (D+ last year)

D+          Environmental (D+ last year)

C-            Zoning (C+ last year)

A             Training & networking program

The study aims to learn what small businesses believe constitutes a healthy political and regulatory climate by having them rate how it is to do business in their specific location along various metrics.

Over 99% of U.S. employer firms qualify as small businesses, and they employ half of all private sector employees. Over the past two decades, almost two-thirds of net new private sector jobs have come from small businesses, and that number has accelerated in recent years.

The thumbtack survey also compared the age and size of the businesses with those of the general business population. The Small Business Administration reports that 69% of small businesses are at least two years old, and 51% are at least five years old.  The survey sample is very close to these numbers, with 76% over two years old and 57% at least five years old.

According to US Census data, 91.6% of small businesses have between one and four employees. Another 3.8% have 5-9 employees, and 4.6% have 10 or more employees. The survey respondents followed a very similar distribution: 89.3% have between one and four employees, 6.7% have 5-9 employees, and 4% have 10 or more employees.

Some of the key findings at the national level include:

• Professional licensing requirements were 30 percent more important than taxes in determining a state's overall business-friendliness, confirming the findings from last year's study. Furthermore, this year's research revealed that 40 percent of U.S. small businesses are subject to licensing regulations by multiple jurisdictions or levels of government.
• Utah was the top rated state, and Austin, TX was the top rated city. At the other end of the spectrum, Rhode Island and Newark, NJ were the lowest rated state and city.
• The ease of obtaining health insurance was an important factor for many businesses. One-third of small business owners rated obtaining and keeping health insurance as "Very Difficult," versus only 6 percent who rated it "Very Easy."
• Small businesses were relatively unconcerned with tax rates – more than half of small business owners felt they pay about the right share of taxes.

The top 10 states were Utah, Alabama, New Hampshire, Idaho, Texas, Virginia, Kansas, Colorado, South Carolina, Georgia, Minnesota, Nevada and North Carolina. Professional/nonprofessional services make up a large share of Thumbtack’s clients, so fewer manufacturers and retailers were surveyed, which may have impacted the survey results.

"It is critical to the economic health of every city and state to create an entrepreneur-friendly environment," said Dane Stangler, director of Research and Policy at the Kauffman Foundation. "Policymakers put themselves in the best position to encourage sustainable growth and long-term prosperity by listening to the voices of small business owners themselves."

Small Business Development Center is Re-launched At UConn Campuses, Chambers of Commerce

The Connecticut Small Business Development Center (CTSBDC), a collaborative initiative of the federal Small Business Administration (SBA), State of Connecticut and University of Connecticut, is being rebooted, redesigned and re-launched in an effort to be more responsive to the state’s small and newly-forming businesses. CTSBDC is a five-year, $11.6 million program to provide financial and technical assistance to businesses with 500 or fewer employees – which accounts for roughly 93 percent of Connecticut employers.

The initiative was announced by UConn’s Vice President for Economic Development Mary Holz-Clause and state Commissioner of Economic and Community Development Catherine Smith during Connecticut Business Day at the State Capitol.  They were joined by Gov. Dannel P. Malloy, President and CEO of the Business Council of Fairfield County Chris Bruhl, UConn Board Chair and Middlesex Chamber of Commerce President Larry McHugh and business leaders from across the state.

“The new SBDC is designed to focus more like a private sector business: close to its customers, interconnected, efficiently using scarce resources, and offering a slate of innovative new services,” Bruhl said. “With a statewide network of 11 local SBDC offices, the Center strives to build the local ecosystem, recognizing that small business begins at the local level.”

The program will fund 16 full-time positions and two part-time positions, with individuals located at each of the 11 service centers, including seven local Chambers of Commerce and four regional UConn campuses, as well as the UConn campus in Storrs, and the Department of Commerce Export Assistance Center in Middletown.

During the news conference, Holz-Clause pointed out that the University is an ideal home for the SBDC, as the power of UConn’s network of more than 100,000 alumni can be tapped to serve as both mentors and connectors for small businesses to ensure they are successful. In addition, the six regional campuses provide the SBDC with an established network of satellite sites that are already engaged in local, state, and national business development efforts. She also noted the work of organizations such as UConn Ventures, which are helping to launch new businesses based on research and innovation at UConn.

“UConn is really focused on growing Connecticut’s economy from the ground up,” said Holz-Clause. “That’s why this partnership is such a perfect fit for us. It builds on some of our existing strengths and gives us a front-row seat for truly exciting developments in the state’s business community.”

Governor Malloy pointed out that “The reinvigorated Small Business Development Center takes our economic development strategy to a new level, combining the academic strength and resources of our flagship university with the knowledge and reach of our chambers of commerce, to bring technical and financial assistance to the sector responsible for the overwhelming majority of our jobs: small businesses.”

The Small Business Development Center program, administered by the federal government’s Small Business Administration, has been providing service to small businesses for more than 30 years and is one of the largest professional small business management and technical assistance networks in the nation with over 900 locations across the country.  In Connecticut, it had been based at Central Connecticut State University and the Connecticut State University System in recent years.  Previously, UConn had hosted the program.

For more information regarding the SBDC and its programs, please visit the newly designed  website at  www.ctsbdc.org. To learn more about UConn’s Office of Economic Development, please visit www.innovation.uconn.edu.

Modest Economic Growth Seen in 2013 Amidst Competing Indicators

The Connecticut Economic Digest, assessing the prospects for the state’s economy in the new year, has unveiled a series of observations and analyses that suggest it may be a challenging twelve months, but not without the possibility of progress, and an overall prediction of “modest growth”.  The first issue of 2013 of the journal produced by the state Departments of Labor and Department of Community and Economic Development, notes a range of factors that could impact economic prospects, among them:

• Tourism: "Last year the state launched a multi-million-dollar, two-year marketing initiative to develop, foster and stimulate the state’s brand identity and bolster business and tourism. Tourism has a significant impact on the state’s economy, estimated by the University of Connecticut’s Center for Economic Analysis at $11.5 billion every year through total traveler and tourism revenue and $1.15 billion in state and local tax revenue. Travel and tourism creates more than 110,000 jobs throughout the state, or 6.5% of Connecticut’s total employment."
• Large businesses: "The state’s “First Five” and “Next Five” job initiatives have promised substantial growth in employment and capital investment in Connecticut. At year’s end, nine business deals had been announced as part of the ongoing expansion program, which leveraged $1.3 billion in private investment. Between the nine companies — Cigna, ESPN, NBC, Alexion Pharmaceuticals, CareCentrix, Sustainable Building Systems LLC, Deloitte, Bridgewater Associates, and Charter Communications — up to 4,748 jobs are expected to be created and 11,087 retained."
• Small Businesses: "The Small Business Express Program (EXP) provides loans and grants to Connecticut’s small businesses to spur job creation and growth and has seen vigorous activity since its inception. The state has assisted 435 companies with more than $60 million in loans and grants. With this much-needed capital, up to 1,523 jobs are expected to be created and 4,080 retained."
• Housing: "The state’s housing market languished in 2011. Residential permit data through September 2012, however,  had grown by 32.2% compared to the same period the previous year. New homes sales grew 5.7% in September, and housing starts 3.6% in October, the highest level in four years."

The Digest noted that “the Connecticut recession from March 2008 through February 2010 saw the loss of 117,500 jobs. Jobs regained numbered 30,700 (26.1%) since February 2010 when the recovery began through November 2012, including 1,900 in the year 2012 through November (0.12%) seasonally adjusted since the beginning of the year. The private sector has regained 42,000 (38.1%) of the 110,200 private jobs lost in that same recessionary period.”  It is forecast that Connecticut will gain about 5,600 jobs or 0.3% in 2013.

In addition, the Digest pointed out that “The state’s unemployment rate, after peaking at 9.4% for five consecutive months in 2010 and falling rather steadily to 7.7% in March and April 2012, jumped unexpectedly through last summer to 9.0% and declined to 8.8% in November.” The New England Economic Partnership forecasts Connecticut’s unemployment rate will be 7.7 % in 2013.

State's Small Business Program Targets Jobs, Economic Growth

When a survey of family owned businesses last year found almost two-thirds of respondents projecting sales and revenue growth in 2013, it appeared that optimism was on the upswing. This weeks’ news from Connecticut’s Department of Economic and Community Development (DECD) on the progress of the state’s Small Business Express Program, launched a year ago, may be a contributing factor. The Small Business Express Program (SBEP) supports the retention and growth of small business in Connecticut through a combination of loans and grants. SBEP incorporates a stream-lined process that provides financial assistance in the form of revolving loan funds, job creation incentives; and matching grants. The program is designed to provide small business with access to capital, support job creation, increase skill development and encourage private investment. SBEP loans and grants are intended to have a positive impact on the growth of the companies receiving the funds, and correspondingly on Connecticut’s overall economy.

Slightly more than 1,607 businesses with 100 or fewer employees applied for loans or matching grants in the program's first year, according to state officials. DECD approved just over half of the applications, and the program is currently helping about 500 small businesses retain 4,616 jobs and to create another 1,738.

The DECD authorized $67.2 million in financing to 494 companies through Dec. 31 -- $27.5 million in loans and $39.7 million in grants. It has already received $412,130 in principal and interest payments. State officials are reviewing applications from another 271 businesses, for an additional $38.3 million.

Components of the program include:

• Small Business Express Revolving Loan Fund - Loans are available at a minimum of $10,000 to a maximum of $100,000 to assist small businesses with capital and operational needs.
• Small Business Job Creation Incentive Program - Deferred Loans are available at a minimum of $10,000 and a maximum of $250,000 to assist small businesses to spur growth. DECD may forgive all or part of loan based on the attainment of job creation goals.
• Small Business Creation Matching Grant Program - Grants are available at a minimum of $10,000 and a maximum of $100,000 to provide a dollar-for-dollar matching grant for specific job creation, capital investment and working capital goals.

The SBEP program assistance has leveraged approximately $40 million in private investment, according to DECD figures. Some participating business owners have noted that banks became more willing to lend once the business is accepted into the program.