At a time when Florida and the nation are suffering through an economic drought, the state is providing water and some tender loving care to selected businesses in hopes they can flourish. The idea is called economic gardening, and the concept is relatively simple: help established companies identify their areas of need, develop plans they can follow to overcome those challenges and even make loans available to spur job growth.
Sarasota and Manatee counties, along with Hillsborough and Pinellas counties, comprise one of six hubs around the state in this inaugural statewide pilot program. The economic development organizations in each county are working together through GrowFL, the agency set up by the state to oversee the program.
In this first year, two Sarasota companies are blazing a trail that nearly 200 other local businesses could follow if the project continues and if they meet the selection criteria.
Economic gardening is geared specifically for “second stage” companies, and Sarasota’s two participants are Gulf Coast Signs of Sarasota and Florikan, maker of controlled release fertilizers. To qualify, a business must be a for-profit enterprise with between $1 million and $25 million in annual revenue, employ between 10 and 50 people, and show positive growth in three of the past five years.
The Economic Development Corporation of Sarasota County, which is overseeing the administration of the state project locally, reports that 178 companies in Sarasota County may meet those criteria. A limited number of companies around the state, however, will be allowed to participate this first year. The state set aside $10 million for economic gardening, with $1.5 million available for consulting services to second stage businesses and the remaining $8.5 million for low-interest loans that will be offered to participating businesses if they can show how the loans will lead to job growth. Once a company has been accepted into the program, the CEO will have a one-hour conference call with a Jumpstart Team, an assemblage of consultants and experts from around the country to identify problems and produce an action plan.
After that initial phase, companies in the program will meet regularly with a peer-to-peer mentoring group called Peerspectives. The facilitated meetings, which will include noncompeting CEOs, will allow participants to open up about challenges, successes and anything
else they want to share or discuss.
Of course, nurturing existing companies has long been a part of many communities’ economic development efforts. But Sarasota EDC President and CEO Kathy Baylis says this program provides a more “structured approach” to businesses that are on solid ground.
“There’s nothing more important right now than to help facilitate the creation of more jobs,” Baylis says, noting that 75 percent to 80 percent of job growth comes from existing businesses, not from transplanted companies.
And while recruiting new companies to the Suncoast will remain part of the EDC’s mission, Baylis says she is encouraged by the possibilities that are being unearthed by economic gardening in Florida.
We asked one of the Sarasota companies that qualified for the pilot program to tell us how it’s working:
A Second-Stage Case Study
Company: Gulf Coast Signs of Sarasota
CEO: Hidayet Kutat
Year founded: 1976
(new ownership, 2003)
No. of employees: 22
Products and services: Manufactures electric
and non-illuminated interior and exterior signs
Growth rate: 5% to 10% annually
The Big Problem
The sign industry is heavily dependent on the construction industry, so as Florida’s real estate problems began escalating in 2006 and new construction plummeted, Gulf Coast Signs felt the hit. And when the company lost a $500,000 account because the client went bankrupt, Gulf Coast CEO Kutat knew he needed an improved marketing strategy to broaden his customer base. But he wasn’t sure exactly how to proceed.
Since taking over Gulf Coast Signs in 2003, Kutat had made it a high priority to practice what he called “lean business concepts” to minimize wasteful spending, while maintaining a steady workforce. No longer able to rely heavily on one major customer, Kutat knew he would have to risk spending money and trying new marketing efforts that were outside his comfort zone to diversify his customer base—yet with no promise of success.
After sharing information and receiving advice from the Jumpstart team, which included experts in manufacturing and marketing, Kutat this year started making changes to his marketing strategy and to expand his customer base.
The Jumpstart team suggested that Kutat aggressively seek out franchised companies, with the idea that one customer could soon become many if all of a business’s franchises put up his signs A trip to a franchise expo in Miami followed, and customer leads are looking promising this spring.
“It seems like something you would just do naturally,” Kutat says of his marketing to franchises. “But the key problem for many companies is not seeing the forest for the trees. You know your own business. You know your issues. And you convince yourself that this or that isn’t for you, that certain things won’t help you.”
Having an outside objective observer who knows something about growing businesses look at your operation can help you see all that the forest has to offer, Kutat says.
The Jumpstart consultants also examined Gulf Coast Signs’ Web site and found deficiencies, such as a lack of vital key words needed for search engine optimization. “Nobody was finding us,” Kutat says. After working with a company to make those adjustments and some other tweaks, traffic to the site picked up quickly. “Right away it started paying dividends,” Kutat says, adding that another recommendation included adding videos to the site to better showcase the company’s products and professionalism. Those should be on the site later this year.
Kutat is looking forward to putting into action the strategies he received in his final report and continuing to learn from his peers as the gardening work continues. He also hopes he can one day help other business owners who are facing challenges.
“The concept sounded good, but I wasn’t sure how it would work,” Kutat recalls of his introduction to economic gardening. “But having gone through it, I would say it’s a very positive thing for a business to do.”
Room for Improvement
Of course, as with any pilot program, Florida’s economic gardening project has encountered a few bugs. Hidayet Kutat, CEO of Gulf Coast Signs, says initial Jumpstart conference calls were somewhat disorganized and confusing. He wasn’t always sure who he was talking to and where exactly all the questions and answers were going.
But Kutat is optimistic that the process will become more refined and that the next generation of companies will reap the benefits of what was learned during the pilot phase.
“I think there was a learning curve for everyone involved,” Florikan CEO John Rosenthal acknowledges, adding that as communication between him and the Jumpstart consultants continued, the picture became less muddied.
He has a bit of advice for companies considering the economic gardening path: “Let everyone know up front what your issues or problems are. If you’re not prepared to do the work, then this probably isn’t for you, because you’ll get out of this what you put into it.”
Though he refers to the upfront information gathering he did to prepare for the Jumpstart process as “rather cumbersome,” Rosenthal says the analysis he received in return was impressive. In-depth strategies included loyalty marketing, patenting technology developing customer profiles and consumer spending models.
“They were very responsive and very helpful,” Rosenthal says. “They did an amazing job digging up information. I’d say we received at least a $25,000 value for what they provided. And that’s something we never would have paid for or could have justified on our own.”
For more information, go to growfl.com.