Indiana turned grim outlook 20 years ago into top climate for startups, innovation
It takes a lot of moxie to roll with the ups and downs of starting a new business. But aspiring small business owners in the Region will find they don’t have to go it alone. A network of experts across the state, in organizations big and small, offers free advice, education, mentoring and connections to resources for building a successful business.
The owners of 33,500 businesses and counting discovered that the economic viability in Northwest Indiana’s seven counties is worth their personal determination and their blood, sweat and tears.
The statewide network of people with business expertise work in organizations from the federal government’s Small Business Administration to the Indiana Chamber of Commerce, and the Indiana Economic Development Corp. to the 10 regional Small Business Development Centers. State universities, Purdue University Northwest, Indiana University Northwest and Valparaiso University, also help guide and support businesses and drive economic growth throughout Indiana.
Many of these agencies are integrated. The SBA funds the Northwest Indiana SBDC, which secures local matching funds from the IEDC and PNW.
One of the funding programs of the IEDC is the READI program. According to Erin Sweitzer, vice president of communications, it will have a significant and transformational impact on communities across the state, including Northwest Indiana, which received a $50 million allocation, the maximum amount a region can receive. Northwest Indiana’s proposed projects are focused on innovation, education, talent attraction and quality of place.
Idea factory
Lorri Feldt, regional director of the Northwest Indiana Small Business Development Center, and her team of advisers work alongside entrepreneurs and business owners in all aspects of starting and growing a business. Individuals come to them with ideas for restaurants and bakeries, retail stores and salons, or manufacturing and agribusinesses.
The advisers might offer market data or how to target millennials or Gen Z consumers.
“We help them gain an understanding of that segment and what motivates them and how to appeal to them,” Feldt said.
No matter how much exposure clients have had to understanding their markets — and some know their markets very well, Feldt said — the SBDC helps them navigate the details.
“We try to meet startup individuals where they are,” she said.
When a company wants to create a physical product for an invention, “Purdue Northwest can help them create a functional prototype for that,” Feldt said.
Alexandra Moran, clinical instructor of entrepreneurship, helps run and teaches courses in Purdue Northwest University’s certificate in entrepreneurship and innovation program.
“We spend a significant amount of time on the experiential learning component,” Moran said. “Experiential learning is not only much more impactful for retention, but what we try to do is to help students create their resumes, their LinkedIn profiles, and actual opportunities and accomplishments where they’ve executed successfully on projects.”
Moran collaborates with her colleague and business partner, Mont Handley, associate director of the Commercialization and Manufacturing Center at PNW’s College of Technology.
“What he did a few years ago, and we’ve worked together on this, is create a concept of commercialization program, locally,” Moran said.
The grant Handley received helps take startups through tasks such as customer discovery, intellectual property protection and presentation skills.
“We partner students with those startups so they can walk right down that road together,” she added.
Moran and Handley are working on formalizing the program to build strategies for attracting venture capital within Northwest Indiana.
“We’re going to start building that ecosystem here,” Moran said.
PNW alumni entrepreneurs will be part of the initiative.
“Keeping together a core group of students and a core group of startups, that’s really the magic sauce, that the startups continue to scale and build,” she added.
Moran said she is one among many resource experts in the Northwest Indiana network who are willing and able to assist businesses.
“If someone needs to be plugged in, they can come to me, they can go to Lorri, they can go to Mont. We’re not that hard to find,” she said, laughing. “The flywheel is spinning. We have successes, including venture successes.”
They are attracting capital, too.
“Five years ago, I couldn’t tell you we’ve been raising venture money,” Moran said, “but now our startups, outside of the competition space, are raising venture money.”
They also are helping women and minorities bring their ideas to market.
“Many of them are owned by women, and women of color, who are getting it done. And that should be celebrated.”
Legislative reforms
The Indiana Chamber and the SBA form a powerhouse of advocacy for businesses, from Indianapolis to Portage and around the state.
Kevin Brinegar oversees the chamber. As its CEO and president, he has steered a team of lobbyists and other business advocates for almost 30 years. He plans to retire in January 2024. Brinegar was instrumental in leading the chamber’s efforts in 2000 to reform business tax laws in Indiana.
Brinegar says the chamber’s top three ways of supporting Hoosier businesses are: legislative and regulatory advocacy, regulatory compliance and employee training programs, and providing information to members/customers regarding policy matters that impact their businesses.
“The Indiana Chamber also works to elect business-minded individuals (through our PAC, Indiana Business for Responsive Government) to the General Assembly in order to create the best business climate possible for our state,” Brinegar said. “Our successful and impactful legislative and regulatory advocacy creates a business environment that makes businesses want to stay here — and locate here.”
The 2000 reforms eliminated the inventory tax, a corporate gross receipts tax, and lowered the corporate net income tax from what once was the sixth highest in the country. Twenty years ago, Indiana’s business story was grim. The state ranked last in job creation and growth, last in economic momentum, and first in bankruptcies and home foreclosures, Brinegar said.
Today, the National Tax Foundation ranks Indiana among the top 10 best states in its 2023 State Business Tax Climate Index. Even more illuminating is Indiana’s current ranking by Forbes as the No. 1 best state in which to start a business in 2023.
The SBA provides funding programs, counseling, federal contracting certifications and disaster recovery. It also provides resources through its partner organizations, loan lenders and other community groups that help small businesses succeed.
Laura Schafsnitz, spokesperson for the SBA, Indiana District, says the agency’s work on behalf of businesses gives them a voice in the White House and with Congress. The agency’s administrator, Isabella Casillas Guzman, is a member of President Joe Biden’s cabinet.
“She can use that power and influence to help encourage legislation based on what small business owners tell her,” Schafsnitz said.
The administration also offers educational programs, including THRIVE: Emerging Leaders Reimagined. Indiana’s business leaders can take advantage of THRIVE, which is focused on teaching skills to entrepreneurial executives to scale their businesses and make them more efficient, profitable and competitive. The six-month program is for those who’ve been in business for three, five or 10 years.
“What small business owners tell us is No. 1, ‘I came out of this with a better idea of how to develop strategy,’” Schafsnitz said.
These local, regional and national advocates of Indiana businesses rewrote the state’s story on business climate through their own purposeful strategies. Besides tax reforms, foundations in Northwest Indiana — including the Legacy Foundation, Crown Point Community Foundation and Unity Foundation — pooled their finances to fund the NWIBizHub.com, a web portal listing of more than 70 business resources across Northwest Indiana.
“We’re the only Region that built a small business portal like that,” the SBDC’s Feldt said. “It was very intentional.”
She said the IEDC is working on building other regional portals.
“It’s more evidence of the support and commitment there is regionally behind small businesses,” she said.
The people who do the work, day-in and day-out, keep “the flywheel spinning,” as Moran calls the regional, economic momentum.
“We have advantages here,” in Northwest Indiana, Feldt said. “We have a work ethic in the Region. Some people call it grit; pick your favorite term.”
Starting a business isn’t for everyone, she said.
“I think we as a local, a regional culture, have that measure of determination and tenacity that is well-suited for entrepreneurship.”
Some call that moxie.
Click here to read more from the February-March 2023 issue of Northwest Indiana Business Magazine.
