From mega tax breaks to innovative business incubators, these places offer compelling incentives to would-be entrepreneurs. Before you start a business, see if the city you’re targeting has a program like one of these after the jump…
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1) Pittsburgh
Pittsburgh may not be Silicon Valley, but the state’s second-largest city hopes to recapture some of its former steel-era glory by becoming a hub for technology start-ups. Bill Gates wannabes can get advice and capital from InnovationWorks, an economic development organization designed to help tech start-ups that could boost the southwest Pennsylvania economy. The region’s largest seed-stage investor, InnovationWorks has provided more than $45 million in financing to more than 125 technology start-ups since it started ten years ago. Business consulting also is available for start-ups, while a grant program helps small manufacturers boost their efficiency and universities develop ideas that could turn into viable products.
Meanwhile, IT entrepreneurs focused on starting web, mobile, gaming or hardware firms can get free office space, mentoring and $25,000 in funding via its 20-week AlphaLab. AlphaLab companies include Careerimp, which helps users create resumes targeted to specific jobs fast, and Devotee, which sets retailers up with mobile loyalty programs.
2) Miami
The recession and housing bust hit Florida hard, but The Launch Pad is looking to help turn the region’s economy around. The assistance network is designed to encourage and support University of Miami students and alumni who want to start ventures — particularly in south Florida.
The Launch Pad offers business education, one-on-one consulting, networking events and other resources to entrepreneurs affiliated with any of the university’s schools, including undergrads, MBAs, doctors and lawyers. While it doesn’t provide financial assistance, the program has so far helped launch 45 businesses that have created more than 100 jobs in the area.
“Our focus is on educating the entrepreneur instead of helping get the venture off the ground,” said Susan Amat, director of the program. “If you give them a good foundation, whether that business winds up working, they have the skill set they need to take that new idea forward.”
3) Menlo Park, California
If you’re an entrepreneur who dreams more about saving lives than creating the next Google, you might want to head to Menlo Park. The city is home to The Foundry, a business incubator that helps universities, researchers and inventors turn ideas for medical devices into successful companies.
The Foundry guides start-ups from the seed stage through IPO by offering business development advice, fund-raising assistance, market analysis, management training, work space and other resources. Since it opened in 1988, The Foundry has helped launch a dozen companies — together valued at over $1 billion and responsible for creating more than 350 jobs. Foundry companies include Concentric Medical, which makes devices to treat strokes, and Satiety, the manufacturer of an obesity treatment designed as an alternative to gastric bypass surgery. The Foundry also licenses its own intellectual property on patented technologies that haven’t led to new companies.
An added bonus: Foundry companies get the advantage of being close to Silicon Valley talent and a bevy of venture capital firms on Sand Hill Road.
4) Arlington, Virginia
Want to be a power player? Companies from government contractors to restaurants and retailers may find that being close to Washington, D.C., can help boost their business.
Arlington woos entrepreneurs with BizLaunch, a small business assistance network that that can connect them with business consulting, financial resources, and market research, among other services. Since its inception in 2002, more than 18,000 people have come through BizLaunch’s doors, asking for advice or attending workshops, said Tara Palacios, director of the program.
They may be referred to an on-site counselor from SCORE, a nonprofit organization that helps educate entrepreneurs, or get help deciding if a business idea really is viable. Sometimes a business that never starts can be considered a success, if it keeps a would-be entrepreneur from wasting money on an idea unlikely to succeed, said Palacios.
Beyond BizLaunch, Arlington offers tax incentives for small businesses that add employees — depending on how many people they hire and where. To spur growth in the Crystal City neighborhood, for example, a business can get a tax break for hiring as few as four employees. In more business-heavy neighborhoods like Rosslyn, the bar is higher.
5) Chattanooga, Tenn.
In Chattanooga, artists and creative entrepreneurs get a helping hand from CreateHere, a three-year-old nonprofit that fosters cultural and economic development in the city. The organization helps groom would-be owners with a leadership development fellowship, among other services.
An 8-week business training course called SpringBoard includes lessons on business planning and CEO peer round table discussion groups. Graduates have been responsible for creating at least 50 local jobs, said CreateHere co-founder Josh McManus.
A newer offering is The Company Lab, a shared office space that gives entrepreneurs both a work space and the ability to connect with other local business owners and resources.
The important part, McManus said, is building community. “We tried to continually stir the pot around entrepreneurship – to make it fashionable to be an entrepreneur in the city,” he said. “And rather than leaning back on us like with many traditional economic development organizations, the folks in the class lean on each other.”
6) Littleton, Colorado
The seeds of a unique program to boost Littleton’s local economy were sown back in the late 1980s, after Lockheed Martin laid off 7,000 people from its facility in Littleton in 1987. Determined to develop jobs that wouldn’t depend on distant corporations, the city created a program called “economic gardening.”
The program helps high-growth companies with 10 to 100 employees become stronger, more stable businesses by providing access to information and resources big corporations take for granted — like market research, competitor intelligence and strategic planning. The city has helped companies that do everything from biotech to engineering with strategy, marketing, sales, creating strong management teams and finding funding. It doesn’t, however, offer tax breaks or financial incentives.
“Our objective is to make an environment that’s nurturing to entrepreneurs,” who are the ones who really create jobs, said Christian Gibbons, the city’s director of Business/Industry Affairs. “Our focus is on those high-level, strategic things that you have to get right to make a difference.”
And Littleton’s economic garden is growing. Among the program’s successful alums are ADA Environmental Systems, a growing pollution-control company that focuses on coal-fired power plants, and Charter Software, maker of business management software for farm and construction equipment dealers.
7) Ventura, California
Like many cities, Ventura wants to boost its economy by helping grow local business. But rather than spend it on training or programs, Ventura decided to become an investor. The city “decided to use this big pot of money to do something that isn’t typical for most cities — to allow a VC firm to invest in companies with the hope of creating jobs locally and in creating long-term revenue through these investments,” said Joey Briglio, Ventura’s sustainable business developer.
So in 2007, the city created a $5 million Jobs and Investment Fund and partnered with a local venture capital firm, DFJ Frontier, to invest in area businesses. It allotted about $1.6 million to invest in companies in the city and $3 million to invest in firms in the surrounding area.
The remaining $400,000 was used to open a high-tech business incubator — the Ventura Ventures Technology Center. The incubator has 16 companies in residence and expects to house three more in the coming months. Residents include Geodelic, maker of a location-based content app for smartphones, and Nueva Vista Media, a media and marketing firm. Companies headquartered at the incubator have created 40 jobs so far, Briglio said, and expect to create another 15 to 30 in the next year or two.
8) Gahanna, Ohio
Even some small cities go out of their way to woo entrepreneurs. Gahanna, a town of just over 30,000 outside of Columbus, offers a big local tax break: a rebate of up to 50% on the city income tax — which is levied at a rate of 1.5% — for up to five years.
The so-called Office and Industrial Rebate is available to businesses with an annual payroll of over $1 million and is negotiated depending on the project investment and number of jobs created for the city.
One recent beneficiary: a small electrical engineering company called IJUS. The tax break motivated the company to bring its main office to Gahanna in 2005 — along with its 25 workers and annual payroll of $1.6 million. IJUS expects to expand its workforce to 40 in the next three to five years.
At the state level, Ohio also is courting business with tax breaks, after a restructuring of its tax code that began in 2005 and will be fully phased in next year. For example, the first $1 million of a firm’s gross receipts are now exempt from state business taxes. Sales made outside of Ohio are now exempt from state taxes. Personal income tax rates also were cut, which helps owners who file business taxes on their personal returns. –Catherine Clifford
