Small businesses across Ohio are booming. New tax benefits and other incentives are driving tremendous small business growth in every part of the state. According to JobsOhio, the Buckeye State offers small businesses the eighth best tax climate in the U.S.
- Ohio doesn’t tax corporate incomes or capital gains.
- New business filings increased for six consecutive years this decade and by almost 22% between 2010 and 2015.
- The Ohio Small Business Investor Deduction, enacted in 2013, reduced the tax bill of small businesses by $1.09 billion in the 2016 tax year, as reported by Policy Matters Ohio (in 2018, the deduction was increased, and the filing process was simplified to encourage more qualifying small businesses to claim the deduction).
- Ohio’s Opportunity Zone program, which applies to 43% of the census tracts in the state, has boosted small business investment in poor neighborhoods, providing federal tax reductions and deferrals, and permanent exclusion of capital gains from taxable income for investments held for at least 10 years (Policy Matters Ohio).
As successful small business owners will attest, growing a startup requires a very different set of skills than were used to start the business. Making the transition from startup to expansion is a critical turning point for every business, but business growth can be particularly challenging for small business owners who often lack formal training in management and entrepreneurship.
Tips to Grow and Scale a Small Business
One skill all successful business people have in common is knowing when to seek the advice of experts. For small business owners preparing for expansion, the advice they need may relate to managing finance, complying with regulations, recruiting employees, training, and supervising new staff. The following tips encapsulate the collective experience and expertise of small business owners who have met the challenges posed by business growth and want to share what they’ve learned with others in the same situation.
Carefully analyze the benefits and risks of growth
A growth plan for a business begins by assessing where the company currently stands in terms of assets, liabilities, and cash flow. Based on the financial analysis, the next steps can include projection of future sales and calculation of the resources required to achieve specific goals.
- Small businesses in Ohio can use the financing guide of the Ohio Small Business Development Center (SBDC) for help planning for business growth.
- The Women’s Business Center of Ohio has locations in Cleveland, Akron, Cincinnati, and Columbus. For a small fee, small business owners can access libraries of resources on every aspect of starting, running, and growing a small business.
- Local offices of the U.S. Small Business Administration in Ohio are listed in the Small Business Resources Guide, including eight SCORE offices and 13 SBDCs.
- The SBDC site provides a complete list of all 28 SBDC locations, including a map showing their locations in the state and links to their websites.
Often a detailed financial analysis or business growth plan will require seeking advice from paid experts whose research and insight can guide decision-making. These experts include accountants, business advisers, and lawyers.
Network with other local and state businesses
The demands of running a small business leave little time to make contact with other organizations in the same industry or line of work. Local and state networks help small business owners understand the challenges they face in their business growth plans.
- Dayton Business Reviews offers links to more than a dozen networking groups in Dayton geared to women, young people, entrepreneurs, and everyone.
- The Women’s Business Center of Ohio (described above) keeps small business owners up to date on upcoming networking opportunities in their areas and across the state.
- Small business owners in the Columbus area will find networking resources on The Metropreneur, including meetups and the local Women’s Business Center.
- The Cincinnati USA Regional Chamber features a range of upcoming networking events in southern Ohio, such as leadership summits, safety presentations, and multicultural receptions at the Cincinnati Art Museum.
- The Toledo Area Small Business Association is affiliated with the Toledo Regional Chamber of Commerce, which features a calendar of upcoming networking events.
Take advantage of tax and government incentives
A central component of any business growth plan is understanding and planning for tax benefits and other incentives offered by government agencies. Small business owners in Ohio benefit from a number of tax programs and incentives geared toward the needs of growing small businesses.
- The Ohio Development Services Agency’s InvestOhio program gives a nonrefundable personal income tax credit to anyone who acquires an ownership interest in a small business in Ohio. The benefit is available to individuals or pass-through entities owned by individuals who hold the investment for two years.
- The Ohio Small Business Deduction was established in 2013 and now can be applied to 70% of the first $250,000 of apportioned net business income. The deduction is available to Ohio residents who report on their personal income tax return any income from a pass-through entity, such as sole proprietorships, partnerships, limited liability companies (LLCs), and S corporations.
- Other financial incentives available to Ohio small businesses are the Ohio Job Creation Tax Credit available through JobsOhio, enterprise zones and community reinvestment areas, and rural business development grants offered by the U.S. Department of Agriculture.
Stay true to your values
Two common pitfalls of small business growth plans include trying to do too much too soon, and feeling the need to meet all the needs of clients and customers. Expansion causes some small businesses to lose sight of the qualities and characteristics responsible for their initial success. At the same time, business owners should avoid placing too many limitations on the goals they set for their business.
The Main Street Alliance of Ohio promotes leadership, community, and responsibility in the state’s small businesses. The group’s goal is to give small businesses a voice in public policy and to help businesses apply the latest economic and scientific research to have a positive impact on the communities they serve, including education, healthcare, infrastructure, public safety, and housing.
Give employees room to grow with your company
Often small business owners take on more responsibility than they should. Particularly when growing a business, it’s imperative for owners to focus on the duties that are most critical to the growth plan’s success and delegate other responsibilities to employees. Doing so provides employees with the opportunity to learn new skills and thrive in new roles, which contribute to their career goals and reduce the chances of employees seeking other job opportunities.
Finding and hiring the best candidates for a small business should be done deliberately, beginning with research on the pay rate and other comparisons of similar positions in the industry. It’s advantageous to have a clear idea of the open position’s responsibilities and the skills required to meet those duties. Because few small business owners have experience recruiting and interviewing job candidates, and also because of their busy schedules, they often rush the hiring process. Seeking the assistance of a recruitment specialist can be a wise investment for a growing small business.
- The National Association of Professional Employment Organizations (NAPEO) offers information specifically for small businesses looking for help with human resources, payroll, benefits, and other standard business functions. The NAPEO site features a “Find a PEO” service that makes it easy to find employment services in Ohio.
- The Ohio Bureau of Workers’ Compensation recently implemented a Policy Activity Rebate program designed to promote the health and safety of small business employees. Businesses can reduce their workers’ compensation premiums by 50%, to a maximum of $2,000, by choosing from among 33 activities, such as completing online safety courses, creating a wellness program, or establishing a safety and health committee.
Continue to value relationships with customers
Setting specific goals for a small business growth plan begins by listening to customers and responding positively to the feedback they offer. However, few small business owners realize how valuable top-flight customer service can be in distinguishing themselves from the competition. The time small business owners take to cultivate relationships with customers is one of the best investments they can make.
Often this requires reaching out to regular customers rather than always waiting for them to initiate contact. Small business owners can solicit feedback by providing customers with satisfaction surveys they can complete and encouraging them to write reviews of the business. Social media can help a business maintain contacts with customers, but more personal approaches are often more effective: a phone call or personal email can have a tremendous impact on current and potential customers.
Treating every client and customer with the same level of attention and responsiveness is the best way to win repeat business and gain customer referrals. In addition to developing first-rate listening skills, small business owners should look to hire employees in customer-facing positions who have excellent people skills. Another way to establish and maintain customer loyalty is by rewarding your best customers by letting them be the first to know about sales, discounts, and rebates.
Seek guidance from other successful owners and entrepreneurs
Some of the best resources for Ohio small businesses looking to expand are business people who have successfully navigated their businesses through the stormy seas of expansion. The Ohio Development Services Agency operates Entrepreneurship and Business Assistance Centers throughout the state that offer technical assistance, employee training, and financial counseling.
- The Ohio Innovation Exchange is a collaboration between industry and universities in the state with the goal of making the latest research available to businesses of all types. More than 13,000 academic researchers and 600 resources from laboratories and campuses throughout Ohio can be accessed by businesses.
- Several sources for small business mentorship are presented in the Columbus Region’s Entrepreneur Resources, which include more than a dozen mentoring sources, such as the Columbus College of Art & Design’s MindMarket; SunDown RunDown that connects entrepreneurs with investors, mentors, and skilled workers via educational programs and workshops; and the first-of-its-kind Women’s Small Business Accelerator.
- The Northeast Ohio Startup Network was created by a group of entrepreneurial organizations in the region to supply new businesses with the financing, resources, counseling, and connections they need to succeed. Among the organizations the network teams with are the Great Lakes Innovation and Development Enterprise, Tech Belt Energy Innovation Center, and the Youngstown Business Incubator.
Fastest-Growing Companies in Ohio
It’s one thing to read about tips and techniques for growing a small business such as those listed above, but it’s another thing to see how real small businesses in Ohio have used those methods to successfully implement their expansion plans. Here are capsule descriptions of 30 Ohio small businesses whose growth strategies have paid dividends and placed them on the Inc. 5000 list of the fastest-growing private companies in the U.S.
Founded in 2013, this Milford-based pet store that specializes in raw food for dogs has seen its revenue grow by 6,754% in three years, reaching $8.8 million in 2017.
The key to this Westerville-based information technology staffing and consulting firm’s 1,956% growth over three years (reaching $2.1 million in revenue in 2017) has been to “value our workforce” and “encourage new ideas,” according to its leader, Pamela Stanczewski.
Offering artificial intelligence (AI) software used by consumer packaged goods (CPG) manufacturers, the firm, which is located in Columbus, saw its 2017 revenue reach $2.3 million, a three-year increase of 1,478%.
Helping companies ensure their workplaces are designed to match their brand has enabled this Columbus-based advertising and marketing service to grow its revenue by 1,347% over three years, to a total of $2.2 million in 2017.
Located in Dayton and founded in 2012, this wine importer’s revenue grew by 1,241% over three years, reaching $4.2 million in 2017.
With 35 employees and $6 million in revenue in 2017, this Brunswick-based company, which conducts background checks and drug tests, recorded a three-year growth rate of 1,166%.
Selling custom children’s furniture, toys, and keepsakes has allowed this Cincinnati-based retailer to grow its revenues by 918% over three years, to a total of $3.7 million in 2017.
Founded in 2014, this Dublin-based transportation and logistics services company with 32 employees recorded $24.3 million in revenue in 2017, representing a three-year gain of 897%.
The firm, headquartered in Willoughby, provides project management and consulting services emphasizing sustainable building management programs. Its three-year growth rate of 888% resulted in $31.5 million in revenue in 2017.
This chain of express exterior car washes, located in Westlake, recorded a three-year growth rate of 760%, reaching $3.1 million in revenue in 2017.
Offering transportation and other services in support of oil and gas firms has enabled this Bowerston-based firm with 204 employees to grow by 676% over three years and record 2017 revenues totaling $26.2 million.
This Cincinnati-based health staffing firm with 443 employees supplies the healthcare industry with nursing, medical, and other health professionals under short-term and long-term contracts. In 2017 the company reached $180.7 million in revenue, representing a three-year increase of 640%.
This nine-person company, located in Medina, offers customer acquisition and other marketing and advertising services to the insurance industry. Its three-year growth rate of 594% led to 2017 revenues of $26 million.
Founded in 2014 and now employing 463 workers, this mortgage and mortgage counseling provider recorded $73.6 million in revenue in 2017, a 589% increase over three years.
Providing proprietary retail systems to the home furnishing industry has enabled this Dublin-based firm with 23 employees to record a three-year growth rate of 576%, reaching $28.3 million in 2017 revenues.
A maker of glass and mirror products sold to consumers, businesses, distributors, and contractors, this Columbus-based company had revenue of $5.2 million in 2017, growing 560% over a three-year period.
Located in Cincinnati, this company provides innovative marketing and advertising consulting to large corporations. It grew by 523% over three years and reached $2.9 million in revenue in 2017.
This Cincinnati-based company serves the construction industry, selling and installing replacement windows and entry doors. Founded in 2014, this firm’s 2017 revenue of $3 million represents growth of 512% over three years.
By offering a marketplace where people license and sell patents, this Dublin-based company grew by 498% in a three-year period, reaching $3.1 million in revenue in 2017.
Helping companies improve their software-development and operations practices led this Cincinnati-based company with 36 employees to $4.8 million in revenue in 2017, a three-year growth of 497%.
Located in Toledo, this company offers logistics and transportation services and recorded $12.2 million in revenue in 2017. Over a three-year period, it grew 496%.
Specializing in vegan and gluten-free skin care products since its founding in 2011, the Copley, OH-based firm grew 487% in a three-year period and had $4.6 million in revenue in 2017.
This maker of electric, lithium-powered commercial lawn mowers, based in Hamilton, recorded $5.1 million in 2017 revenues and had a three-year growth rate of 480%.
This Heath-based hauling firm with 15 employees grew 442%over three years and had 2017 revenues totaling $4.1 million.
Offering talent and staffing services to a range of industries, this Cincinnati-based company recorded a three-year growth rate of 441% on $63.4 million in revenue in 2017.
Located in Cleves, west of Cincinnati, this firm provides asphalt paving and other site contracting services to the construction industry, reaching $7.6 million in revenue in 2017 for a three-year growth rate of 414%.
This Columbus-based marketing and advertising service with 260 employees specializes in immersive experiences to promote brands. Founded in 2013, it had $13.9 million in revenue in 2017 and a three-year growth rate of 409%.
By offering software that uses machine learning to improve prevention of electrical failures, this Columbus-based firm recorded $4.1 million in revenue in 2017, growing 400% over three years.
This Cincinnati-based company’s logistics services include truck freight brokerage, expedited shipping, and freight forwarding. It reached $26.4 million in 2017 revenue and had a three-year growth of 381%.
This architecture and engineering firm, located in Columbus, offers its services in a range of commercial and community projects. Its $4.8 million in 2017 revenue represent a three-year growth rate of 371%.
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