Part 3: The Good, the Bad, & the Ugly
Aired September 4, 2002
Northeast Ohio has a reputation for being less than hospitable to new business ventures. A recent survey places Ohio 49th out of 50 state for the number of new business start-ups. Poor government resources, conservative attitudes and lack of financial resources are cited as the stumbling blocks to improving that track record. As part of this week's Quiet Crisis series, ideastream's Shula Neuman has been exploring the various aspects of what the region is doing to keep entrepreneurship kicking. In today's installment, she looks at what the problems are that prevent more people from starting a business in Northeast Ohio.
Pick up an annual report or computer manual and notice how it's put together; the pages are in order, they are all cut to the same size and the binding doesn't show the glue that keeps the leaves together.
It's highly likely that the book in your hand was assembled at Spiral of Ohio, a binding company in an industrial section of Cleveland's South Side. John Helline, COO of Spiral of Ohio, says his company can bind about 25,000 books an hour since he added a $1.2 million piece of machinery to his operation.
John Helline: ...goes down a conveyer into the trimmer. It cuts off the head, the food and the face comes out, goes in the stacker, comes out the stacker and you have a book.
It wasn't a passion for books that brought Helline into bookbinding; it was a desire to own his own business. Because his plant is located in the city of Cleveland - and in an area that has seen better times - he had hoped that the government would treat his venture kindly.
But when he and his partners moved in, they found the county tripled the valuation of their property. Helline says he attempted to dispute the assessment, but only received a parking ticket for his efforts because he went two minutes over on the meter.
John Helline: I was only two minutes late because they took forever - they were in a room behind closed doors for a half an hour beyond my appointment. So they sat in the room for a half-hour, I get in to the room, I give my speech, they say, "Well, it makes a lot of sense. We're glad you're trying to invest in this area, we're glad your employing these people. You're doing a good job but you're denied because you're not an attorney. (pause) OK…if I get an attorney can I-well, you can appeal next time but you only get one appeal. They gave this whole…and I'm like, I threw my hands up. Walk outside and I get a ticket and I'm done.
Helline says no one in the government has done anything to make him and his partners feel valued for employing 100 people and for staying in the city. Helline's company has expanded and he recently opened a plant in Atlanta. He says his experience there-where the city bent over backwards to accommodate his needs-highlighted how frosty the climate in Northeast Ohio is for new businesses. It's not as if Helline's concerns have fallen on deaf ears. At least one organization that supports the region's businesses had heard the cries.
Steve Millard: In Ohio we are regulated to death a lot of ways as business people.
Steve Millard, executive director of the Council of Smaller Enterprises, or COSE, says the city, region and state need to recognize the impact government interference has on deterring entrepreneurs.
Steve Millard: When you look at the different taxes that we impose on businesses as a state, from personal income tax to corporate income tax, property taxes, sales taxes, death taxes, internet taxes, we just have a lot of regulation and government interference in the things that we do. In fact, we rank 46th nationally in terms of the way government interferes with the success of small business. Those are the things that will have to change in this state.
Millard and others are quick to point out that the barriers to entrepreneurs aren't all regulatory. People who are not in the established business circles have a difficult time making the connections they need to obtain financing for their projects, and, Millard says, this is especially true for minorities.
Kim Sanders can speak first hand to that. She's an African American woman who is CEO and president of New Concepts Consulting, a software development company based in Beachwood. Sanders moved to the Cleveland area from Columbus for a job and decided to start her business in Cleveland because it seemed to her that Northeast Ohio is less prejudiced than Columbus. Still, she says, it hasn't been easy.
Kim Sanders: If I had to do it over again, I probably wouldn't do it here, to be honest with you. Because it's very hard. But it teaches you discipline because if you can make it in Cleveland, I honestly believe you can make it anywhere.
Since New Concepts got certification for government contracts, Sanders says, government set-asides, programs that are awarded specifically to minority contractors, have been very helpful in sustaining her business. She says she doesn't like it, but it's one of the necessary evils of our culture.
Kim Sanders: In an ideal world, we would not need set-asides, That's true. We would not need set asides in a ideal world - but because it's not an ideal world, we do need set asides. We do.
Sanders does point out that despite the obstacles, there is a lot of good work happening in Northeast Ohio geared toward helping entrepreneurs get their footing - you just have to know where to look. In Cleveland, Shula Neuman, 90.3.