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The State of Small Business: Wisconsin

Marci Martin
Marci Martin

As part of our yearlong project "The State of Small Business," Business News Daily plans to report on the small business environment in every state in America. In this installment, we asked a few of Wisconsin's more than 440,000 small business owners about the challenges and opportunities of operating in their state. Here's what they had to say.

Wisconsin is known as the land of cheese, beer and the Green Bay Packers, but there is much more to the state. Wisconsin offers plenty of opportunity for small business owners, with tax incentives, access to support agencies, a robust transportation infrastructure, a rich manufacturing history and a renewed commitment to entrepreneurs and startups.


Economic health and strong manufacturing industry

According to Wallet Hub, Wisconsin ranks fifth in the nation for economic health. The state offers several incentives to new businesses, down to the municipality level, as each town or city is looking to attract companies to its industrial parks, downtowns or office areas. As of September 2016, Wisconsin's unemployment rate was 4.1 percent — one of the lowest in the country, according to the U.S. Bureau of Labor Statistics. The fastest-growing job sector is Financial Activities, closely followed by Education & Health Services and Manufacturing.

Manufacturing is deep in Wisconsin's history and in its potential for new businesses. Manufacturing makes up about 20 percent of the state's gross domestic product (GDP) and employs nearly 458,000 workers. To keep the tradition alive and bring in new opportunities, Wisconsin offers significant tax incentives to keep the work in the state. Wisconsin has offered a Qualified Production Activities Income (QPAI) credit since 2013 and, in 2016, was fully phased in. That means that manufacturers in the state can offset almost all of their Wisconsin tax liability this year.

Support for new business development

Recently, Wisconsin has turned to supporting emerging companies. Wisconsin residents start about 40,000 new businesses a year and has Small Business Development Centers (SBDCs) to help those business owners succeed. It receives federal and state support through the Small Business Administration. This is a great resource for new businesses but also for existing businesses looking to expand current state operations or move into the state.

The Wisconsin Housing and Economic Development Authority (WHEDA) is particularly excited about the $1.6 million provided to mostly high-tech startups over the past three years and hopes to see it grow.

"We have to be able to walk and chew gum at the same time," said Zach Brandon, president of the Greater Madison Chamber of Commerce. "We have to support one of our core historical and future industries, while at the same time looking at trends that will influence the future."

There are also resources and support down to the county level, and not just the counties with Wisconsin's largest cities. Mark Cattone, president of Diversified Assembly Technologies (DAT) in Necedah, cites the support of Juneau County as a reason for the success of the DAT since the employees bought the facility in 2001.

"They provided a startup loan for DAT so the employees could purchase the company, and then helped during our recent struggles with sudden growth over the last few years," Cattone said.

Great atmosphere and location

Currently based in Illinois, Cattone is choosing to set up a new company in Wisconsin, Clean Beam LLC, a food chain safety company developing products that make the food chain safe.

"I chose Wisconsin because it's friendlier than Illinois," he said. "There is a lot of talent in the area, in terms of engineering, and a nice-size workforce pool. The location is not far from Madison, which helps with that, and along the I-90/I-94 corridor, making shipping easy. Wisconsin also offers a tax credit to angel investors, which makes this very attractive to them."

Expansion is also ripe for businesses. Mill Haven Foods, in New Lisbon, recently signed a developer's agreement to add a 77,000-square-foot (7,000 square meters) facility in Tomah, 20 miles (30 kilometers) down the road and, at the same time, signed another developer's agreement to expand the company's existing facility. 

"We were able to match up what we have with what they were looking for," said Tina Thompson, president and CEO of the Greater Tomah Area Chamber of Commerce. She helped facilitate the expansion with the city administrator and city council once contacted by the owners. "It came together quickly," she said.

That "can do" attitude is statewide, Thompson noted. "Our state is poised for significant growth," she said. "People are investing right now after being overconservative and stretching out of their comfort zone now that the economy is stable again. A lot of it is just putting the puzzle pieces together."


Exiting student population

Wisconsin has its challenges, but nothing that cannot be overcome with a further commitment to the future. One such challenge is training and retaining student residents in the state. Postsecondary school programs have been slow in developing programs to target the needs of the 80,000 job openings in the state; nearly 14,000 graduated students leave Wisconsin each year for jobs in other states, reported Wisconsin Public Radio.

Lack of entrepreneurial education

Dan Steininger, president and co-founder of BizStarts, says Wisconsin is "late to the party" in supporting startup companies. BizStarts helps with the creation of new companies in southeast Wisconsin. In a blog post, Steininger noted that entrepreneurship can be taught.

"Wisconsin's public and private colleges are only starting to recognize the need to teach entrepreneurship and support students," Steininger said. "Professor Bill Aulet … documented in his book, "Disciplined Entrepreneurship" (Wiley, 2013) the track record of MIT alumni in starting businesses. His point is that entrepreneurship can be taught, but that we haven't been teaching it. Those MIT graduates succeeded, not because of the use of unique technology from MIT, but because of the skills they were taught as part of their curriculum."

Resources for small businesses in Wisconsin

If you're a small business owner in Wisconsin who is looking for resources to help you move forward, here are a few organizations you might want to learn more about.

Wisconsin SCORE

Score's volunteer business professionals and expert "mentors" give counsel and guidance to entrepreneurs who are looking to start or expand their businesses. The services are entirely free and volunteer-driven. Here are some of the chapters in Wisconsin. 

SCORE locations in Wisconsin 

U.S. Small Business Administration District Offices

The U.S. Small Business Administration (SBA) offers financing and grants, as well as consultations and counseling services. There are also opportunities to apply for federal government contracts through the SBA and avenues for obtaining assistance in the wake of natural disasters.

U.S. SBA District Office

Wisconsin Small Business Development Center (SBDC)

Wisconsin's SBDC is a statewide network supporting entrepreneurs and business owners. Each center offers no-cost, confidential business consulting and targeted educational programs to help improve and grow small and emerging companies in the state. You can find your region's small business development center via the link below.

Wisconsin SBDC

Marci Martin
Marci Martin
Business News Daily Contributing Writer
With an associate's degree in business management and nearly 20 years in senior management positions, Marci brings a real-life perspective to her articles about business and leadership. She began freelancing in 2012 and became a contributing writer for Business News Daily and in 2015.