Think Small

By Susan Burns January 31, 2009

John Rhodes, senior principal at Lakewood Ranch-based Moran, Stahl & Boyer, advises companies across the U.S. and Canada on their location needs and helps communities with economic development. He says it’s time to stop thinking about attracting the big companies. Economic development today hinges on small, knowledge-based entrepreneurs. 

What are you seeing in the relocation consultant business?

Our industry is going through its own gyrations because of the economy; the circumstances are different for every type of business, so it’s hard to generalize. Traditionally financial incentives were used to bring in the larger outside companies. But today the fate of many communities hinges on helping small local entrepreneurial businesses, particularly on the professional services side, to grow up. And that’s a different way of thinking.

How is it different?

We’re talking about attracting individuals or companies of 10 to 20 employees. These companies are not looking for big tax relief and big buildings. They are looking for lower-cost space or just a good space. They want to know ‘Can I see the bay?’ ‘Is it funky?’ ‘Does it have restaurant next store?’ They want amenities.

What kinds of companies are you talking about?

People in professional services and consulting—healthcare, management, marketing consulting, not just lawyers, accountants and doctors. It’s the nurses who have started consulting businesses. I run into an unbelievable amount of people when I travel in and out of the Sarasota Bradenton Airport who have perfected their careers and created a small business; they want to be in Florida and fly in and out. Some of these companies are sneaking in without us knowing.

Why are they coming here?

The vast majority came here because they had family here. Many then brought their businesses. We don’t need to go to other places to find entrepreneurs. We need to intercept what’s here. [People who might consider relocating here] are coming here already.

How can we reach them?

The tourism folks need to bombard them with stories about other people who started businesses here. Every tourist publication and every tourism Web site should include a section about people who have vacationed here and ended up starting a business. Visitors are already looking in these places, and it’s a low-cost way to attract their attention, show them what other businesspeople have done and how they’ve done it.

What do these small businesses and entrepreneurs want?

Incubators. The low-cost space and support services and the enabling activity that happens between the small business administration or local colleges like MCC or USF. We need to get that energy for small business startups rolling so the software guy from the Ringling College of Art and Design or that New College student with a good idea has a place to go. We need to create more entrepreneurial spirit, not just training people to work for other people. In the old days an M.B.A. meant finance training to create finance people. Now we need people who are creative, flexible and broad-minded.

It sounds like a lot of these entrepreneurs will be young. Are they going to want to live in communities that are seen as resort and retirement-oriented?

It’s a challenge. We’re still perceived as focused on baby boomer and above. I have a son home for three weeks right now. What do you do? They want to find a place to go dancing, have a drink, go camping and do outdoor activities like biking and hiking. They’re surprised once they get here that we have these amenities.

How do younger job seekers make the decision about where to work?

When things get tougher, they’ll go where the job is, regardless. But if young people had their druthers, they would go to Denver or Portland first, so place is more important than company. And young people have no interest in staying with a company for a long period of time. They do not want a job for life. Not in the cards. Some will have three jobs their first year or so. You have to create opportunities for these kinds of people, a whole package of things to keep them stimulated.

What’s in the package?

The job environment has to be team-oriented. They like a nice attractive place to work, they like to be challenged intellectually—early. They don’t like to be bored; they’ll move if they’re bored. They’re a pretty fickle bunch. We want those kinds of people, especially in a changing environment. They bring energy and ideas. But it’s more of a challenge because you have to feed them with more interesting things to do.

What can the business community, elected officials and economic development officials do to grow these smaller companies?

First of all focus on fundamentals. Are we educating the labor force for what we need? We need high schools with training for the workplace; we need a variety of levels of education. The other is to keep a constant eye on the types of facilities these people need. A lot of these smaller companies want a building that exists, not dirt. They want flex buildings, part warehousing, part office, part assembly.

The good thing is these companies come in with a small footprint. It’s not like a company that comes in and says we need 500 jobs in high-speed assembly in 10 minutes. These smaller companies don’t have to hire a huge amount of skilled people in a small time, and this allows the infrastructure—the facilities and educational system—to understand the company and respond to its needs.

Is our airport crucial to attracting those companies and talent?

The SRQ situation is critical to the future. It’s a darned good resource. When energy costs got really high there was a potential of small airports losing a lot of flights. As a smaller airport you’re always at risk of the carriers shedding the smaller markets. But our airport doesn’t just rely on business travel. Tourists are holding it up. Using the Sarasota Bradenton Airport depends on where you’re going, though. If Tampa International Airport can’t get you there directly then it’s not worth going to Tampa. You can use SRQ.

What about manufacturing?

Manufacturing is a dirty word. But entrepreneurism isn’t. Kids want to make things but they don’t want the connotation of working in manufacturing—they think of risky jobs, cycling out of industries, boring work. But manufacturing is anything but that. A manufacturing environment has job opportunities that span every career level. And manufacturers don’t want to leave this country. Lack of workers is the No. 1 reason companies are leaving. It’s not because of cheap labor. Vast majorities of parents have said, ‘Don’t go into that factory, go to college,’ even though manufacturing jobs pay well. When I talk to manufacturing companies, they say people are not begging to work; it’s the jobs that go begging for people. Manufacturing companies may have 300 people show up for job openings and after screening and the first week or orientation, less than 15 of the 300 are working.

Is it realistic to think the community will get behind this sort of vision?

Unfortunately, the fundamentals of how to get things done isn’t news. And it’s what we need to have. Our two EDCs are terrific if you look at them on a national scale, but in many respects they’re in the wilderness. They need a ground swell of the community to get behind them. A large proportion of the wealth and talk in this community isn’t committed here; they’re snowbirds, they come to have fun, not to invest, and that’s unique to Florida. In other communities people move lock, stock and barrel, but here they come only half the time. That makes it a huge challenge. We have a lot of retired people here who are talented and bored. We need to put them to work. At the Sarasota Newcomers Club they will do anything not to be bored. They are a hidden resource. We need to get them in SCORE (Sarasota County Organization of Retired Executives) and beyond; they could become investors. We ought to consider an investment pool for local companies that they can help. It’s a ripe opportunity right now. They can watch their investments on a daily basis.

Case Studies

Why three small firms relocated here.

1. Quasar Bio-tech Inc.

Frank Kramer and Peter Nesbitt, 306-5812 (Web site does not have photos)

2. Focus Hospitality Services, LLC   (see Web site for photos of principals Pat and Jerald Good, or call Pat 926-6293)

3. Steelgate (see Web site for photos of Kate and Barry Grayson, 758-1122 or call Barry’s cell at 592-9731

Company: Quasar Bio-Tech

Quasar was founded in 2001 in Valley Forge, Pa., by Peter Nesbitt, president. The company manufactures photo rejuvenation devices for use by medical professionals and consumers; it currently has three employees with plans to hire 24 in 2009 in design engineering, manufacturing and quality systems.

Relocated to Manatee: December 2008

First visited the region: “Peter came down in April 2008,” says Frank Kramer, now a partner in the business. “He didn’t even have any idea this place existed.” Nesbitt was looking to relocate his business in the south and Kramer, a Sarasota product development specialist, was working for Quasar on a contract basis. When Nesbitt was getting ready to consider new locations, Kramer told him to consider Manatee and Sarasota.

Reasons for relocating: Close proximity to Kramer, lower facility costs and wages, venture capital and an environment of small entrepreneurial startups that could supply Quasar. “It’s good to be around a lot of small companies that are trying to do something,” says Kramer. “They don’t get bogged down in procedure; they’re entrepreneurial in spirit, fluid.”

Plans for growth: Sales in 2007 were $500,000; in 2008, $1 million. Quasar expects triple-digit growth in the first half of 2009 as it introduces new products and starts manufacturing them in this region.

Company: Focus Hospitality Services, LLC

Focus Hospitality is a real estate development and construction company specializing in hotels and water parks, mostly located in the Midwest; its portfolio includes 21 properties, four of which are under construction or in planning stage, in the IGH Hotels Group (Holiday Inn, Hampton Inn, Holiday Inn Express and Suites, Candlewood Suites and a planned Staybridge Suites); the company was founded CHECK THIS in 1990 by Jerald Good, president and CEO, and his wife, Pat; five employees work in Sarasota and 10 in its regional headquarters in Valparaiso, Ind.

Expanded to Sarasota: 2008

First visited the region: “We started visiting our in-laws about 20 years ago,” says Pat Good. “In 1993 we bought a small villa at Rosedale Country Club, and then we upgraded. We wintered here until last year when we purchased a home on Bird Key, and we liked it so much we decided to live here permanently.”

Reasons for Relocating: Florida lifestyle of sun and water; Sarasota Bradenton International Airport (“We leave about once a month to go to northwest Indiana and we can catch a direct flight to Chicago and be there in two hours,” says Pat) and quality of employees. “We received great resumes, better than we could have found in northwest Indiana, which is a small place.”

Plans for growth: “We would like to grow over time, but we’re waiting out the economy. And we’d love to bring all our employees down here. We’ve offered them the opportunity, but people have families and other obligations.”

Company: Steelgate Inc.

Formerly located on Long Island, Steelgate is an international cryogenic archive that stores, preserves and manages frozen specimens, such as blood, urine and tissues, connected with biochemical research; founded in 2002; president and CEO, Kate Grayson; COO and executive vice president, Barry Grayson; 13-15 employees.

Relocated to Manatee: 2005

First visited the region: “Kate’s parents had wintered on Siesta Key for many years, and Kate and I got married on Siesta in 1993,” says Barry. ”It’s been an annual ritual at Christmas to come back. We just loved the area.”

Reasons for relocating: Quality of life, cost of commercial space and electricity, proximity to several airports, and good pool of employees in data entry and management. “Steelgate was growing and needed more space,” says Barry. “The east end of Long Island is somewhat agricultural with not a lot of commercial space. What’s there is very expensive. When we came down Christmas 2004 we started to look at relocating. The area was vibrant then and growing. Since we support clients globally we need to be near international airports with specialty courier services, and SRQ, Tampa, Fort Myers and St. Pete satisfy that. Electricity makes up six percent of our costs, as you can imagine. Electric rates here are a fraction of New York’s.”

Plans for growth: Opening an office in Belgium in 2009

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