IEDA Business Growth Presentation

The Indiana Business Growth NetworkThe Indiana Business Growth Network

IEDA Annual Meeting, Indianapolis

March 5, 2011

Scott HutchesonPurdue Extension

Purdue Center for Regional Development

Successful Communities Build Networks to Support Business Growth

Focus BOTH on new enterprises (entrepreneurship) and helping existing businesses grow.

Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.

Which Are “Growth” Businesses?

• BBQ Restaurant

• Local Drycleaner

• Beauty Shop

• Personal Trainer

• Mini Blind Manufacturer

• Medical Device Developer

Growing Businesses Are Innovative Businesses

• An innovative business introduces new products and/or processes each year

• Only 15% of businesses are typically innovators – usually have high growth trajectory

Growth & Innovation Can Come from Unexpected Places

• A BBQ restaurant starts bottling and selling sauce• A dry cleaners develops a new “green” process

and licenses the new process• A beauty shop develops a new way to train

stylists and goes nationwide

http://www.acenetworks.org/upload_files/file/Regional%20Flavor%20June.pdf

Growth & Innovation Can Happen Anywhere

Helena, MontanaPink Gloves Boxing

A Tale of Two Growth Companies

A Tale of Two Growth CompaniesA Tale of Two Growth Companies

• Founded in Washington (State) in 1971

• Initial investment - less than $8,000

• 2006 sales were $7.8 billion

• Created 145,800 jobs

• This is their founder

A Tale of Two Growth CompaniesA Tale of Two Growth Companies

• Founded in Washington (State) in 1971

• Initial investment - less than $8,000

• 2006 sales were $7.8 billion

• Created 145,800 jobs

• This is their founder

• This is their logo

A Tale of Two Growth CompaniesA Tale of Two Growth Companies

• Founded in Washington (State) in 1971

• Initial investment - less than $8,000

• 2006 sales were $7.8 billion

• Created 145,800 jobs

• This is their founder

• This is their logo

A Tale of Two Growth CompaniesA Tale of Two Growth Companies

• Founded in Indiana in 1985

• Initial investment - less than $2,000

• 2006 sales were $1 billion

• Created 14,743 jobs

• This is their founder

A Tale of Two Growth CompaniesA Tale of Two Growth Companies

• Founded in Indiana in 1985

• Initial investment - less than $2,000

• 2006 sales were $1 billion

• Created 14,743 jobs

• This is their founder

• This is their logo

A Big Difference Between A Big Difference Between Starbucks and Papa John’sStarbucks and Papa John’s

A Big Difference Between A Big Difference Between Starbucks and Papa John’sStarbucks and Papa John’s

The Billion $ Question

What makes a community a great place for businesses to grow?

Understanding Business Growth

Stage 4 (500+ Employees)

Stage 3 (100-499 Employees)

Stage 2 (10-99 Employees)

Stage 1 (1-9 Employees)

Second-Stage Businesses

• Privately-held businesses• 10-99 employees • Revenue of $750,000 to $10 million• Dealing with growth issues instead of

survival issues• Intent and capacity to keep growing

Second-Stage Firms in Indiana

Establishments Jobs

MSA 2006 2008 2006 2008

Self-Employed 34.5% 36.1% 5.7% 6.4%

Stage 1 (1-9) 55.4% 55.7% 28.9% 30.6%

Stage 2 (10-99) 9.5% 7.7% 36.9% 35.9%

Stage 3 (100-499) 0.5% 0.4% 15.4% 14.8%

Stage 4 (500+) 0.07% 0.05% 13.1% 12.3%

YourEconomy.org – Edward Lowe Foundation

Focusing on Business Growth is Something New

Business Attraction • Cheap land• Cheap labor• Cheap taxes• Cheap utilities

Business Growth• Information• Infrastructure• Networks

What “Information” Do Second Stage Firms Need?

• Help in articulating and realigning with their Core Business Strategy

• Market Intelligence to answer important questions

• Guidance on search engine optimization and effective use of social media

• Leadership & management team development to make sure people are slotted right

Success in Littleton• Littleton, CO developed and began to

execute the strategy in 1989• Focused on “wealth” creation not “job”

creation• Eliminated all incentives and tax breaks for

business recruitment• Since 1989, more than doubled the number

of jobs from 15,000 to 35,000• Sales tax revenue tripled from $6.8 million to

$19.6 million

Indiana Business Growth Network

• IBGN is a growing network of business- support organizations (Purdue, SBDC, LEDOs) piloting economic gardening and other business-growth tools with two regions currently engaged:– North Central Indiana (Greater Lafayette and

Greater Kokomo– Central Indiana

Example IBGN Projects• Analytical Test Laboratory needed

information about global competitors and ideas to attract more potential customers to their website

• Manufacturer needed list of potential customers that meet certain criteria including a commitment to sustainability

Adding Business Growth to Your Strategy Portfolio

• Investing in Business Growth services to help your community’s Second Stage companies grow.

• Demonstrate Value to a new group of companies in your community

For More InformationFor More InformationScott Hutcheson

Purdue Extension & Purdue Center for Regional Development

Burton D. Morgan Center for Entrepreneurship1207 W. State Street, Room 227

765-494-7273 (office)765-479-7704 (mobile)

hutcheson@purdue.edu