Thursday, March 15, 2012

The Time Is Right For Small-Business Creation In The State of Michigan

The following was published in the Downriver News Herald on March 14th, and we agree:

WHAT'S NEXT?: Time is right for small-business creation in state
Published: Wednesday, March 14, 2012
By Austen Smith

With a jobless rate reaching a three-year low and an economy slowly breaking free from recession, business leaders in Michigan are looking toward the future instead of brooding on the past.

Emerging technology has helped shift our economic base and indicators are pointing to a ripe time for small business creation.

For Michael Rogers, vice president of the Lansing-based Small Business Association of Michigan, the recent surge of entrepreneurship can be credited in part to a business-friendly governor and Legislature and also to the small business support programs such as the ones his organization offers.

Rogers said state lawmakers have Michigan on track to becoming one of the more business-friendly states in the country, and pointed to the fact that SBAM dedicates a significant portion of its time and budget to lobbying on behalf of more than 13,000 members.

“The quick answer is yes, there has been a trend over the past few years for more people who are supporting local, independently owned businesses, and that has been led in part by the efforts by our association to get policymakers to do their part,” Rogers said.

In January, the Michigan Business Tax ceased to exist, replaced with a corporate income tax in which C-corporations will see a 6 percent tax on all federal taxable income apportioned to Michigan. The personal income tax rate will stay at 4.35 percent, but will drop to 4.25 percent in 2013.

According to a statement from the Michigan Economic Development Corp., the new tax structure will simplify the tax code and businesses will see an estimated 86 percent drop in their state business taxes.

“All industries are in line for significant tax cuts, thus reducing operational costs and encouraging new investment in the state,” according to an MEDC press release.

Rogers said the elimination of the Michigan Business Tax and the continued support for the alternative business income tax aimed at cultivating small businesses is an important step for the state’s job creation future. Another piece to the puzzle, according to Rogers, will be the concept of “economic gardening,” a buzz phrase now circulating through Lansing.

In November, the MEDC launched its Economic Gardening Pilot Program and selected 54 companies to receive a package of consulting services in the areas of strategy and management; market research, competitive intelligence; Internet and social media strategy; and geographical systems to help locate customers in other states.

The pilot program zeroes in on “second-stage” companies that can be defined as any non-lifestyle business nearing the $1 million per year revenue mark, and having the proper direction for coordinated growth can be the difference between a thriving future and eventual death, Rogers said.

“The goal of this program is to help these second-stage companies grow and, in turn, generate new private investment and create new jobs for Michigan,” Michael Finney, MEDC president and CEO, said in 2011.

“The program is part of our toolkit for economic gardening that’s built on Michigan’s broad asset base of strong corporate enterprises, innovative entrepreneurs and rich technology resources.”

One of the companies selected for the pilot program is Pixel Velocity in Ann Arbor, a video surveillance business that deals in large-scale security imaging for airports, marine ports and mass infrastructure buildings such as sports stadiums.

Started in 2001, Pixel Velocity fits right into that sweet spot for potential massive growth in the coming years being in a high-tech field that has carved out a definite niche for its services.

For Ann Arbor-SPARK, described as a small business incubator, it is high-tech businesses like Pixel Velocity that will represent a definitive cornerstone for the state’s economic future.

Skip Simms, Ann Arbor-SPARK senior vice president, said they focus on cutting edge technology business concepts seeking to expand out of state. They provide a valuable bridge between private enterprise, he said, and the available public programs support and help direct that growth.

“We seek out the new and innovative ways people are doing things that are improving the way that we work and live,” Simms said, “and it all starts with education, and that’s an important component of what we do.”

Simms has seen more support being thrown behind technology start-ups and small business growth by way of statewide programs and through heightened awareness on behalf of the consumer. He sees those types of trends starting 10 years ago, however, before the economy as it was then was lambasted into recession.

“I see this as over a long period of time,” Simms said. “We have a state moving toward more and more an entrepreneurial culture. There are more and more young and talented people who are thinking more entrepreneurial than there were in 2001.

He said one needs only to look at the state of the economy during the past decade when many Michiganders were forced to pursue start-up businesses after being laid off. It was in about 2005 that the “seeds were really planted” for more small business support programs and organizations such as SPARK, he said.

“We have seen entrepreneurship grow drastically since then,” Simms said. “But this all takes time. All the signs are very positive right now. We have a growing number of incubators in our state, and the venture capital industry has probably tripled in the state over the past few years.

“The direction and momentum is clearly there.”

© Copyright 2012 The News Herald, a Journal Register Property & part of Journal Register MI

Thursday, March 1, 2012

Wealth Management Corner

Market Weather Conditions

US equity markets remain jittery through the new year even while making new 52 week highs. Optimism in the US is compromised by the uncertainty in Europe. There remain several moving issues that need to be solved before confidence can be restored.

Investor sentiment is largely biased towards the US which we believe is warranted, as we continue to see strength in many of our economic indicators.

Wealth Management Strategy Corner

Our strategy remains the same through the new year. Our US stock sector bias favors Consumer Staples and Consumer Discretionary. We are underweight in Financials and Information Technology. We remain focused on high-quality dividend paying companies. Our relative bias among asset categories favors equity. We have shifted to favor developed market stocks over emerging markets with European contagion risk still on the table.

The fixed income market continues to be volatile, but rates remain at very low levels. Interest rates move in very long cycles and we have been in a declining rate environment for the last 25 years. At some point we will begin to see rates rise over a sustained period of time. Those rates will be driven by inflation expectations. At this time we do not see inflation as a cause for concern.

This letter expresses the views of the authors as of the date indicated and such views are subject to change without notice. MBT Wealth Management Group (“The WMG”) has no duty or obligation to update the information contained herein. Further, The WMG makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is the potential for loss.

This letter is being made available for educational purposes only and should not be used or construed for any other purpose. The information contained herein does not and should not be construed as an offering for advisory services, an offer to sell, or a solicitation to buy any securities or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends and performance is based on or derived from information provided by independent third-party sources. The WMG believes that the sources from which such information is derived is reliable; however it cannot guarantee the accuracy of such information or the assumptions upon which it is based.