It is that time of the year to list and revisit our New Year’s resolutions. Hopefully, at the top of many Michiganders’ lists is the goal of starting a new business or growing and strengthening an existing organization.
The 2016 election season is behind us. Regardless of the outcome, we can stand united by sharing a desire to collectively survive and thrive as individuals, employees, and employers focused on strengthening and sustaining our local and state economy. Made in Michigan, Born and Raised in Michigan, Relocated to Michigan, and Imported from Michigan are a few slogans that serve as colloquially, patriotic mantras that can help to spur the entrepreneurial spirits of our citizenry and business community.
Entrepreneurial spirit and home-state pride alone can only attribute to spurring some of the recent, entrepreneurial growth in Michigan. The Bureau of Labor Statistics (BLS) table of Business Employment Dynamics indicates in the most recent years (2013-2015), an increase of new businesses in the state of Michigan. Additionally, establishments (growth of existing businesses) have also experienced positive gains in Michigan. Construction, Tourism, Technology, Healthcare, Professional Services (i.e. Telecom, Banking, and Finance), and Manufacturing in the private sector have contributed to an economic resurgence. Traditionally, Michigan’s economy has risen and dropped with the ebb and flow of the global automobile industry’s dynamism. All too often, “Big Business” is the focal point of job seekers, business educators, and analysts.
But according to a 2015 report by the U.S. Small Business Administration (SBA), there were 856,352 small businesses operating in Michigan, representing 98 percent of all Michigan companies, and 50 percent of all of Michigan’s employees. Small businesses also account for 89 percent of Michigan’s exports, which represents 21 percent of Michigan’s total known export value.
Going back to the “hypothetical” New Year’s resolutions of starting or growing a business in Michigan in 2017, there is obviously room for optimism for both the entrepreneur and the “intrapreneur,” considering one out of every two employees in Michigan is employed by a small business. To avoid over optimism and grandiose thinking, let’s explore the following five topics related to entrepreneurship.
Why do Many Entrepreneurs Fail? Entrepreneurial gurus and experts often cite top reasons why entrepreneurs fail. Many attribute the following realities for start-up failure:
- Lack of industry knowledge expertise (i.e. competitive intensity, key success factors, market growth rate)
- Being underfunded
- No viable network of colleagues and potential partner(s)
- Half-hearted business planning
- Poor sales performance
- Market invisibility
- The inability to quickly change (pivot paralysis)
The inverse of these factors doesn’t always equate to entrepreneurial success. We should never undermine the power of grit, faith, experience, the fate of favorable circumstances, and numerous stints of illogical resilience.
Entrepreneurial Resources: Every entrepreneur comes to quickly understand that there are four, primary resources that are needed to produce a sound, product and or to provide a viable, service. Human, Capital, Information, and Finance are the critical resources, whether we are considering making tacos or manufacturing tires or any and everything in between.
In recent years, Michigan has shown an uptick in the number of laborers returning to the state. However, infrastructure and capital investment woes continue to stifle Michigan’s complete economic, resurgence. On a brighter note, the invaluable resource of “Information” is plentiful and abounding for current and future entrepreneurs.
The glass for Michigan-based entrepreneurship is certainly half-full. An increase in the types and diversity of information and educational opportunities made available through Michigan’s colleges and universities is encouraging and advantageous to and for entrepreneurs. The federal government’s support of apprenticeship programs can also help to retool and prepare Michigan’s labor pool in coming years.
Raising capital and securing funds is yet a challenge for budding and aspiring entrepreneurs. The Michigan Economic Development Corp. (MEDC) offers programming and support including, but not limited to, A Capital Locator Tool; Grant Funding Programs; Business Plan Competitions; Equity Funding; and Venture Capital and Private Equity Sourcing.
Entrepreneur Education/Training: Traditional business education does offer guidance and direction through coursework, internships, service-learning projects, and apprenticeships. Michigan has no shortage of college and universities that offer training and business education. An associate and or bachelor degree in business administration requires coursework in accounting, economics, ethics, finance, human resource management, management, marketing, operations, business law, strategy, and information systems.
Many business programs also require students to complete an internship or a field-based learning exercise. But how can a traditional business program offer legitimate, internships in entrepreneurship? Well, there are a limited number of start-ups that hire interns at minimum and or no-wage. The challenge for founders and partners of start-ups is their immediate, need for skilled and experienced talented employees who can make an immediate impact to their organization; thus hiring and recruiting interns is not always a top priority.
Michigan’s Entrepreneurial Landscape: So many of today’s local entrepreneurs have to continuously secure and invest resources and seek training while navigating and manipulating a force-field that includes political, economic, societal, technological, eco-environmental, and legal factors at both the local and national levels. In addition to producing sound products and providing viable services, these are truly not indomitable tasks. With continued reinvestments in infrastructure, K-12 and post-secondary education, innovation, and community vitality, coupled with the aforementioned attributes of successful entrepreneurs — Made in Michigan, Born and Raised in Michigan, Relocated to Michigan, and Imported from Michigan — the state’s economy will continue to grow and be enhanced in the years to come.
Cleamon Moorer is the dean of the College of Business at Baker College in Flint, Michigan’s largest private, not-for-profit higher education institution.