COMPILED BY JOHN JOSEPH PARKER, CONTRIBUTING EDITOR
SMALL BUSINESSES ARE THE economic engine that
powers communities, says Quint Studer, author of Building a Vibrant
Community: How Citizen-Powered Change Is Reshaping America (Be the Bulb
Publishing, 2018). “A healthy business presence can turn around a struggling
community and make a healthy one even stronger,” he says. Here are some smart
steps leaders can take to create a community that attracts startups and
supports the companies that are already there, according to Studer.
Make sure your focus is on economic growth. Judge
all community projects through this lens. Growth is almost always driven by
private investment. It’s the key to job creation and a strong, sustainable tax
Create a vibrant downtown that appeals to young talent.
Creating events that bring people downtown is the first step to creating a
vibrant, walkable, livable downtown. Many communities do this with farmers
markets, festivals, outdoor concerts, and so forth. Other key ingredients are
places to eat and shop, office space and residential developments.
Invest in affordable housing. “This is a huge
issue in attracting talent,” notes Studer. “Young people and empty
nesters in particular want to live where they work so it’s great if you can
figure out how to get local investors to commit to building affordable housing.
Focus on a strong education system. This creates a strong talent base and appeals to investors. Do everything you can to improve yours, not just now, but in the future.
Elect and appoint leaders who put the community first.
They should be willing to listen to new ideas and make it easy and
comfortable for people to do business there. That means ensuring all
guidelines, codes and zoning rules make sense and are clearly spelled out and
enforced. Further, leaders should be easily accessible and available to answer
questions to assure that decisions about planning and developing are made
quickly, efficiently and in the right order.
Make sure companies have a safe, clean environment in
which to operate. Attractive urban and suburban spaces and low crime rates
are good for business. If you’re in an unsafe area, it won’t matter how good
your product or service is. Customers won’t come.
Create a dashboard showing critical, objective metrics, update it regularly, and keep it in front of citizens, businesses and investors. It will provide concise information about relevant factors like economic performance, well-being of the population, high school graduation rates and where entrepreneurs are located. These metrics will attract investment and keep citizens and decision-makers mindful of where improvements are needed.
Use the dashboard to create a compelling story. Does the community have a high graduation rate? Are there a lot of Millennials? These are the kinds of data points that can be used to showcase a community’s advantages. And don’t forget about the other factors that don’t show up on a dashboard. Is there a downtown? A great university? Is the community known for its art and culture? Is the cost of living affordable?
Find ways to help start-ups get access to capital. One
way they help entrepreneurs is by creating leases that move up and down based
Consider hosting a small business challenge. This
is a contest in which people compete to submit the best small business idea.
The winner gets funding and support for getting their new venture started.
This really gives a big boost to startups and small companies.
Galvanize your business community. Being
business-friendly doesn’t just mean making it easy for people to start
companies. It also means keeping them growing. A fully engaged business
community is the key.
Diversify, diversify, diversify. “It’s easy to
have a little success in one area and then focus on that area too much,” notes
Studer. “Healthy economies are based on more than just tourism or just
manufacturing or just banking. They need diversity to thrive.”
One more important factor for a strong small business
ecosystem? A culture of community support. This is the nutrient-rich soil that
allows a business to really take root and thrive over time, says Studer.
“Entrepreneurs need to feel that the community is
invested in their well-being,” he says. “Once leaders start this
conversation, the community will respond.”
COMMERCE asked top accounting firms and law firms
to discuss how New Jersey could become more business-friendly, and how they
are assisting their clients. Here are their thoughts, insights and best
Goldstein Lieberman & Company LLC By
Phillip Goldstein, CPA, Managing Partner
Our state and municipalities should improve access to
funding for start-ups. Offer tax incentives. New Jersey once had one of the
lowest income tax rates in the country. Today, taxes are so high any
entrepreneur would have to ask “why” start a business here? Be creative with
those incentives—let businesses with the greater number of employees pay less
taxes. Loosen the regulation stranglehold—fast track the building approval
process. Create new business incubators especially for those industries New
Jersey is eager to attract. Stay in touch. Getting entrepreneurs here is one
thing—keeping them here is also a challenge. Facilitate communications and
provide networking opportunities. Invite those of us who have been here longest
to mentor the newcomers. We’re here to help.
Grassi & Co. By Michael Hochman, CPA,
CCIFP, Partner, NJ Office Market Leader
Whether we are willing to admit it or not, government
policy does play a part in the creation, trajectory and success of small
businesses—sometimes their policies can benefit entrepreneurs and sometimes
they can hurt. Tax and other incentives offered to entrepreneurs, as long as
they make economic sense, could bring jobs and much-needed tax revenue and
economic growth to the state. In the development stage, entrepreneurs tend to
be smaller operations and could use much-needed property tax relief, which
would entice them to purchase commercial properties which would maintain and
increase real estate values and their underlying investments. With regard to
the numerous and many times onerous regulations, entrepreneurs could be
provided full exemptions or reduced compliance requirements to ease the burden
on these early stage businesses, who generally don’t have the back-office
capabilities to comply and this would make it more attractive to operate in
Levine Jacobs & Co., LLC By Michael H.
Karu, CPA, CFF, CGMA
On a state level, it all starts and ends with taxes and
tax incentives. New Jersey does have the “Angel Investor” program, whereby
investors in a qualifying emerging New Jersey technology or life science
business can get a tax credit. New Jersey needs to expand upon it and advertise
it better. On the local level, towns can reduce real estate taxes or provide
facilities to entrepreneurs. Towns can host events allowing the entrepreneurs
to meet other business owners, town officials, and interested residents,
providing a forum to introduce their businesses. Many towns have Chambers of
Commerce or service clubs, such as the Rotary Club or Kiwanis Club. Those
organizations should invite the entrepreneurs to come in and talk about their
businesses and to advise what is needed to help them thrive. Communication is
SobelCo By Alan D. Sobel, CPA, CGMA, Managing
For starters, New Jersey needs to become the best place
for entrepreneurs to start and maintain their business. The density of our
population creates a unique opportunity for entrepreneurs to reach multitudes
of potential customers and our highly educated workforce presents great
opportunity to leverage skills into dynamic organizations. But, unnecessary
regulations, among the highest taxes in the nation, and a lack of solutions to
fix long-term fiscal and physical infrastructure issues in our state are a
drag on growth and on the ability for an entrepreneur to succeed. By
definition, entrepreneurs are risk-takers, but taking on the risk of fighting
these counter forces limits or impedes their ultimate success. Entrepreneurs
will find alternatives of where to start and grow their business unless New
Jersey seriously addresses these impediments.
Cole Schotz P.C. By Jeffrey H. Schechter, Esq.,
Chair, Tax Controversies
New Jersey must create a better environment for
entrepreneurs by becoming more tax-friendly. New Jersey taxes entrepreneurs at
rates among the highest in the country. The Corporation Business Tax is imposed
at a 9 percent rate when net income exceeds $100,000 and an additional 2.5
percent surtax when net income exceeds $1 million. For entrepreneurs who hold
their businesses in flow-through entities, they will be subject to one of the
highest individual income tax rates in the country—8.97 percent for income
above $500,000, which jumps to 10.75 percent for income above $5 million. The
tax allows for virtually no deductions. Most daunting is the highest property
tax levy in the country on a per capita basis. Because these taxes are no
longer fully deductible for federal purposes, the pain is compounded. Bringing
these taxes down will bring more entrepreneurs to the state.
Connell Foley LLP By John D. Cromie, Esq.,
Chair, Corporate and Business Law Group
Small businesses are the economic engine of New Jersey.
The most important steps that state, county and local governments can do to
create and foster a more entrepreneur-friendly environment are to commit to
policies that encourage business formation and growth, the free flow of capital
and job creation. Government at all levels needs to lower taxes, eliminate and
simplify business regulations, and assist small business owners in attracting
and retaining a well-qualified labor force. New Jersey enjoys many advantages
over other states, but government and administrative agencies must be mindful
of the challenges faced by entrepreneurs and small business owners and take
steps to support economic growth for the benefit of New Jersey and the region.
These policies will help attract and keep small business owners in New Jersey.
Chiesa Shahinian & Giantomasi PC By Francis
J. Giantomasi, Esq., Member
It is my view that entrepreneurs would benefit greatly
from an interactive, user-friendly communication apparatus—whether a
newsletter, website, digital kiosk or other device—that more tightly
integrates the many, evolving incentives New Jersey has to offer at both the
municipal and state levels. In addition to continuously broadcasting the
state’s business-friendliness to the world’s entrepreneurs, the platform would
bundle otherwise disparate incentive packages, streamline the incentive
evaluation and selection process, and foster deeper collaboration and synergies
among New Jersey and its municipalities. I would think of it as the virtual
equivalent of the ongoing amalgamation of three of the state’s top economic
development functions—the New Jersey Economic Development Authority, Choose New
Jersey and the Governor’s Office—under one roof at One Gateway Center in
Gibbons P.C. By Frank T. Cannone, Esq., Chair,
Be more flexible. Running a business, and particularly
being an entrepreneur, is an extremely difficult, ever-changing venture.
Recognizing this, governments, including New Jersey and its municipalities,
are trying to keep up, but they move slowly, as political entities with numerous
rules, regulations and penalties for violations and dependent on legislators,
regulators, voters, judges and similar influences. Governments can look beyond
by-the-book rules to the challenges that entrepreneurs face struggling to
stay competitive in a complex global marketplace. Rather than search for ways
to penalize them, look at the equitable side—as in a court of equity—asking
what is fair and supporting entrepreneurial efforts where the desire is not to
break the rules or cheat but to improve their businesses for the betterment of
the state and society.
Harwood Lloyd, LLC By Thomas Loikith, Esq.,
The New Jersey commercial recording website makes the
formation of a new business quick and easy. But both the state and municipalities
need to make growing a small business less burdensome with fewer regulations,
lower taxes and fair employment and labor laws. Consolidation of regional
services, lower property taxes and lower car insurance premiums for individuals
and entities would all help make New Jersey a place where an entrepreneur
wants to start and grow a new business.
Norris McLaughlin, P.A. By David S. Blatteis,
Esq., Co-Chair, Business Law Group
New Jersey and its municipalities need to continue to
fund and more thoroughly promote existing organizations and programs designed
to incentivize entrepreneurs in the state, such as the New Jersey Angel
Investor Tax Credit Program, and the New Jersey Economic Development Authority
(NJEDA). Most entrepreneurs do not know that the NJEDA has invested more than
$51 million in venture capital funds that invest in emerging technology companies,
or that 21 tenants are using space at the Commercialization Center for
Innovative Technologies. I also question whether entrepreneurs are aware of
the New Jersey Business Incubation Network—a collaborative community of
business experts and resource facilities dedicated to enhancing the commercial
success of early stage and expansion stage entrepreneurial companies. More
funding for these valuable organizations and programs, as well as publicity,
will create a better business environment for entrepreneurs in the Garden
NPZ Law Group, P.C. By David H. Nachman, Esq.,
U.S. Managing Attorney
The immigration and nationality lawyers at the NPZ Law
Group, P.C. believe that states and municipalities can promote entrepreneurship
by formulating programs like E-2 Investor Visas and EB-5 Regional Center
Programs (designated by the state departments of labor) to incentivize
investments on both a local and state level. Additional ways to promote
entrepreneurship are to create partnerships with academic institutions to
extend local and regional business incubators; provide special tax incentives
in the locales to permit special tax credits for entrepreneurial endeavors; and
to provide special incentives to encourage entrepreneurs to live and work in
these states and municipalities.
Wilentz, Goldman & Spitzer, P.A. By Brett
R. Harris, Esq., Shareholder
New Jersey laws addressing business entities should be
updated to provide maximum flexibility for structuring of transactions,
including allowing for corporate conversions to limited liability companies, an
entity form frequently used by entrepreneurs. Since entrepreneurial ventures
are often based on innovative platforms, our laws should be revised to facilitate
adoption of technology such as use of blockchain to document corporate records.
Finally, recognize that for all businesses, whether traditional or
entrepreneurial, attracting and retaining a talented workforce is critical.
High quality of life within close proximity to the workplace can be a deciding
factor in recruitment. Our state and municipalities should focus on developing
communities with access to quality education, transportation, healthcare,
cultural institutions and recreational facilities, and should support the
non-profit organizations, which can provide these services while alleviating
burdens on governmental resources.