All it Takes is a Cup of Coffee

As the son of an entrepreneur and CEO of my company, I know the struggles and rewards of small business. Thirty years ago when my father’s idea was turned into reality, our company was born.  Our company engineers and manufactures high quality, innovative products made by hard-working Americans. It’s because of this, the company continues to grow and provide job opportunities in small-town Minnesota, and granted us the opportunity to become a philanthropic leader in the community. What I’m getting at is this—t­he small business world has infinite potential when we support entrepreneurship.

I learned of a small business program steadily making its way across the states, 1 Million Cups. The two-year old non-profit program supports start-ups by giving them a platform to present their fully developed new business ideas to other successful entrepreneurs and executives. The program is run by volunteer entrepreneurs who provide coaching and mentoring—not to mention valuable business connections—all while providing attendees a complimentary cup of coffee. Business over a cup of coffee – exactly as my dad would have it!

While this program does not provide direct opportunities to raise capital, it’s the kind of complementary networking and support that new business entrepreneurs need to grow their business; this type of program is what small business in America needs for the economy. I’m happy to see small business supporting one another by sharing experiences, advice and connections all over a cup of coffee.

Tax Incentive Madness

When is it going to stop? New York Gov. Andrew Cuomo’s initiative, Start-Up NY, is giving New York companies 10 years of tax-free business. No income, business, corporate, state or local taxes, sales and property taxes, or franchise fees! See information here.

It’s government entity against government entity competing with each other for private entity business while screwing the taxpayers. And for that matter it seems like small businesses never win. This is just another example of giant corporations winning the lobby contest with states setting up tax-free zones. Mistakes continue to rise.

“Don’t expect these zones to achieve much,” said Iain Murray, vice president for strategy and a financial and trade expert at the Competitive Enterprise Institute in Washington.

Accept for large corporations because they are the ones that pay a corporate tax, electing C Corporation status. Small and medium-size businesses tend to be flow-through entities such as partnerships and S corporations that pay no entity level tax.

Start-Up NY applies only to new or certain expanding businesses that are willing to partner with universities in the state and locate near their campuses. And only those businesses “with 100 percent of their operations … in a tax-free area” would receive a zero tax liability.

Why not focus on micro-investments and infrastructure for existing rural companies that are the backbone of the economy? Stop chasing shiny objects trying to attract new business while ignoring existing companies. This approach, recommended by aGreaterInvestment.com, is a much more efficient use of limited government resources.

Large corporations need to pay their fair share of taxes and municipalities should stop subsidizing them.

Another Useless Taxpayer-Funded Program

I read an article about a taxpayer-funded economic development start-up called AccelerateMSP and thought, wow, even the startup’s CEO acknowledges the program can’t give entrepreneurs what they need to succeed. Yet, somehow, the city of St. Paul, the state and a few other private foundations are funding this program. Why?

Using taxpayer money, the program receives funding to counsel entrepreneurs and connect them with resources. Wonder what “resources” they’re talking about? Well, it’s not the capital that small business owners need most – it’s access to opportunities and people.

Every successful entrepreneur knows the importance of seeking out opportunities and people; an entrepreneur needs capital not counseling programs and loosely defined resources to build their business.

Government should stop dumping taxpayer money into AccelerateMSP’s bewildering counseling and resource program in the Twin Cities. Rather, the state and private foundations should look for economic development opportunities in rural areas supporting small and medium-sized startups that possess the drive, knowledge and resources to succeed with the right support.

Put millennials to work. Decrease student debt. Help rural Minnesota businesses thrive. Perfect!

I like the idea. It’s creative. And as the article says they hear from manufacturers about a lack of trained workers. I have difficulty finding both trained and untrained workers for my rural manufacturing operation. The idea of apprenticeships and putting students to work and lowering their debt is a great idea for government assistance. See the article here.

We have to do what we can to stop the “ brain drain” from rural Minnesota. The right training programs and conduit agencies connecting businesses with colleges will help.

I like these micro ideas instead of the grand scale subsidies for large corporations that we lobby against. To me micro concepts like apprenticeships are the best value and investment for the taxpayers with the broadest and most positive economic impact.

AS IF THE NFL NEEDS A TAX BREAK!

Okay, this one I can’t believe. For all the trouncing the wealthy do on the “nanny state” that is our welfare system – what about the corporate welfare system? Not only does the NFL and its owners accept copious amounts of taxpayer dollars to fund their stadiums they want to reach in government coffers to subsidize their billion-dollar championship games!

The NFL is trying to layer on additional public subsidies beyond what they already get for the new shrines to football. Their efforts seek to find the most lucrative venue for the Super Bowl by pitting state governments against one another in a bidding war to attract the world’s largest single sporting event. See article here.

“State leaders must weigh it all against the political consequences of handing out tax breaks to the National Football League and potentially some of the nation’s most highly paid athletes.” No kidding. The only sense in this article is from Republican Sen. David Osmek from Mound, Minnesota: Osmek said the NFL gins up the competition and then works community leaders into a frenzy over who can offer more.

We’ve seen this before. When are we going to get it right and start investing in small and medium-sized businesses and stop subsidizing the largest of corporations? We need the right infrastructure in rural Minnesota so small and medium-sized businesses can thrive. We are the backbone!

What we don’t need is subsidizing multibillion-dollar sports entertainment. I think the professional athletes and their mothership NFL organization can take care of themselves and pay their fair share of taxes.

Good approach to using government funds

Read original article: Montevideo firm adding second factory to build ice-fishing castles

American Surplus and Manufacturing’s ice castles aren’t the only fairytale aspect to their story. So is the recent state loan that is actually well deserved and immediately being put to great use.

American Surplus plans to hire 20 workers for its new Pine River plant. The $107,500 that the Company received from the state allows for a new space and increased production.

The business was started in the Montevideo location in 1993, but has now reached a point where production demands have outgrown the factory there. Besides finding a niche market and building a successful small business (they reached $23 million in sales last year), what is commendable about the Company is their responsible use of government funds.

They earned business in MN, and they’re keeping it here. They’re not just shopping around for a municipality that will give them the most tax incentive. They’re even putting up $975,000 of American Surplus’s own money to make their growth a reality.

This is a good approach for deciding who really deservers taxpayer money. Simply ask, what have they done for us lately? In this case, the answer is a lot.

Shakopee is Heading in the Right Direction

Read original article: Shakopee is rethinking tax incentives for prospective employers

Yes, giving financial breaks to new businesses (that are usually huge companies not needing any subsidies) in a municipality shifts too much of the tax burden onto existing businesses (often small) and local residents. Thankfully, Shakopee is looking at ways to curb this practice.

It just makes sense to have some rules that hold these companies accountable for their projections. Otherwise, it’s a free-for-all for the big guys and a great expense for the small guys.

Obviously, state-of-the-art facilities, increased local employment, and an improved city economy are goals that every city should strive for. But this does not need to be achieved by unrestricted tax abatements. Having some rules just makes sense. It’s a step in the right direction.

If It’s Broke, Fix It!

Read original article: Why handouts are a bad way for state to help companies

The proof is in the pudding, people. Let’s just look at one bit of evidence. In 2011, the Star Tribune conducted an analysis of more than 650 job-creation deals put together from 2004 to 2009 that provided state and local tax breaks, low-interest loans, grants or other benefits. Of those projects, 125 companies didn’t meet their hiring requirement. At least 46 of those companies provided no lasting jobs at all.

That’s over a 19% failure rate and a 7% colossal failure rate. What gives, government? Why aren’t we fixing this broken system?

We are talking about wasted taxpayer money that runs millions of dollars high. Just gone, poof! There’s no return on these investments. Taxpayers don’t receive benefits like improved infrastructure, stronger schools or more cultural institutions. No, instead we get to watch $700,000 in our money go to Price Mechanical, a 68-year old Canadian company that doesn’t even need the money.

The consensus among economists for years has been that public incentives for private, for-profit companies are terrible economic policy. I agree. Something’s broke. We need to fix it.

Minnesota Manufacturing Expansion is a Double-edged Sword

Read original article: Manufacturing expansions in Minnesota are booming, creating jobs

Of course we feel warm and fuzzy reading statements like: “State officials estimate that 112 construction projects worth $800 million were underway recently;” “We have an unemployment rate of just 4.6 percent;” and “The overwhelming factor that makes companies choose Minnesota is our well-educated and qualified workforce and our diverse and improving economy.”

The troubling truth, however, is that the expanding companies are multimillion dollar corporations who choose MN because our government gives them forgivable loans, state tax-increment finance agreements and one company even got a $4.9 million tax incentive package.

Why not give, at least some, of that state money to the smaller businesses who are the backbone of our economy? How much better would our employment rate be if we diversified our incentives instead of lumping them into these huge sums for already prosperous corporate giants.

Don’t get me wrong; it’s a good thing we’ve got forward movement economically. But I don’t like to see this happen as a backhanded slap at our small businesses.

Let’s Keep This Trend Going

Read original article: Manufacturing making a comeback, report says

It’s nice to know when you’re being heard.

This report and the prospects that lay ahead are encouraging. It’s good to hear that Americans are taking care of themselves. But, there is still a lot of work to be done.

We need to close the skills gap completely. Let’s get those 14 bills passed. Just yesterday I was talking with legislators from both sides of the aisle and we concurred that education and training in the high schools and the local colleges were a key to unlocking the promise that is small business manufacturing. There is some comfort in other officials backing our sentiments.

And while I commend Caterpillar, GE and Ford for reshoring, I just hope they don’t make the same mistake again. They should never have left our workforce behind in the first place. Even though the Chamber of Commerce’s statewide visits are officially over, keep on coming down to my plant. Keep on seeing the faces in my factory. The guys and girls who keep America running make me proud every single day.

I will say I’m encouraged, though. We’re not out of the woods yet, but all hope is not lost, either.



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