Fifty-four small and midsize companies from around Michigan have been selected to receive business development support through the Pure Michigan Business Connect Economic Gardening Pilot Program being offered by the Michigan Economic Development Corp., including Atomic Object and Proos Manufacturing.
“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,” said Michael A. Finney, MEDC CEO/president, last week. “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.”
The program will be administered through the Cassopolis-based Edward Lowe Foundation and will include four areas of support: strategy and management; market research/competitive intelligence; Internet and social media strategy; and geographical information systems to help identify potential customers in other states.
The support from the Economic Gardening Pilot Program does not entail financial assistance; rather, it is hours of consultation and research data provided to each CEO by a four-person Strategic Resource Team arranged by the Lowe Foundation.
According to the Ewing Marion Kauffman Foundation in Kansas City, economic gardening is an economic development model that embraces the fundamental idea that entrepreneurs drive economies as opposed to large existing corporations. The model seeks to create jobs by supporting existing companies in a community. The concept was pioneered in 1987 in Littleton, Colo., and is an alternative to traditional economic development practices.
The Edward Lowe Foundation is especially interested in the concept and is supporting such programs that assist second-stage companies, according to the Kauffman Foundation.
Under the Pure Michigan Business Connect program, the team from the Lowe Foundation will work with each of the 54 CEOs to determine the specific areas of help needed to enable the company to grow, and then supplies the CEO with relevant and actionable information about their competitors, markets and customers. Each company engagement is expected to take a total of two to three weeks to complete.
“Each company’s CEO will be paired with a Strategic Research Team for a total of 35 hours spread across all four members of the team,” according to the MEDC announcement.
Atomic Object, 941 Wealthy St. SE, is a software development firm founded in Grand Rapids in 2001 by Carl Erickson and Bill Bereza. Their collaboration began at GVSU, where Erickson was a professor and Bereza a student.
“We build ridiculously good custom software for startups, huge companies and everyone in-between,” states its website. Erickson describes that in greater detail as “web, mobile and imbedded” software made to order for clients, which range from automotive companies and aerospace to the video games industry.
“We are very successful at what we do,” said Erickson. The company has clients around the nation and now employs about 32. But Atomic Object has been growing at about 25 percent per year and is “now at a crossroads,” said Erickson. It has been turning down work and has a backlog of projects scheduled.
“Right now we are taking a step back,” said Erickson, “taking a more strategic look at growth possibilities,” because adding more people to the workplace increases the difficulty of maintaining maximum team collaboration and innovation.
Atomic Object knows “how to set up a really effective, high-performance team and culture” in what it calls “innovation services,” said Erickson, so it is considering doing that again, in an area with a large talent pool and many potential customers: the Detroit area.
“The east side of the state is intriguing to us,” he said, noting there is technology and entrepreneurial activity taking place in downtown Detroit that makes it “an exciting market for us,” adding that “there’s just so many more people over there” in the software development labor pool.
“But on the other hand, it’s a market I don’t really know that well,” he added.
That’s where the Economic Gardeners from the Lowe Foundation come in. They will “help us think through what our best avenues for second-stage growth is,” said Erickson.
Will Erickson be spending time at the Lowe Foundation in Cassopolis, or will they be coming to Grand Rapids?
“I honestly don’t know,” said Erickson. “It’s totally new and I’m not sure they know. It’s a little bit mysterious”
“Our experience shows us that second-stage companies exposed to economic gardening techniques grow at faster rates than their peers,” said Penny Lewandowski, director of entrepreneurship development at the Edward Lowe Foundation. “MEDC’s support of the pilot program is exciting news for Michigan's second-stagers — and a clear indication of the commitment our state has made to the next generation of Michigan success stories.”
The 54 companies were selected by an independent review board from a pool of 108 nominees submitted by local economic development representatives. The companies were chosen based on the type and size of the markets they serve, their growth potential and their likelihood of benefitting from the service.
Proos Manufacturing is another company with the potential to grow but looking for help on how to get there effectively. Located at 1037 Michigan St. in Grand Rapids, Proos recently received one of the state’s Best Small Business awards from the MI-SBTDC, and is also among the 2011 Michigan 50 Companies to Watch, as well as recipient of the 2011 Family-Owned Business of the Year award from the Small Business Administration.
Proos produces metal stampings and sheet metal components for a variety of manufacturing industries and is led by CEO Amy Engelsman.
Engelsman said 2011 has been “phenomenal,” requiring the addition of 22 employees, bringing its total employment to 77. The company just leased another 30,000 square feet of space and spent $500,000 on new production equipment.
“The fact that the state of Michigan is creating another incentive program and another project to help second-stage companies (is) amazing,” she said.
Proos can use advice on its strategic vision, she said.
“How do we get into other markets? And how do we expand out of West Michigan? We’ve been doing business in West Michigan for 90 years; if we want to continue on this growth path, we need to expand out of West Michigan. So they’re going to help us with that.”
That may entail new marketing strategies that involve social media — or perhaps not, she said.
“As a company, we need to get educated and see what applies to us in each situation, and go with it,” said Engelsman.
The Economic Gardening Pilot Program is the latest addition to Pure Michigan Business Connect, the $3 billion public-private initiative that provides Michigan’s businesses new ways to buy and sell, raise capital and connect with each other through an alliance of the Michigan Economic Development Corp., state agencies and major Michigan companies and organizations, according to the MEDC.