The Government does not Create Jobs for Private Business

This past week during CNBC’s Street Signs program a CEO of an American manufacturing company was being interviewed for a segment that examined hiring being done in that industry.  The question report asked the executive how a job is created.  He quickly responded by saying that it’s important to remember that the goal of a private business is to be successful (make money).  He continued that a bi-product of that success is the creation of jobs.  He suggested that what the government needs to do is to try and work with private business to help them achieve success, to improve processes in order to be better.  (see the segment: http://video.cnbc.com/gallery/?video=3000042483)

 

Since I began in my position nearly two years ago I have heard the politicians say that the government needs to get busy creating jobs, and this was the best response I have heard to that proclamation.  There are businesses that are successful right now, but they are holding off on growing that success (creating jobs) because they are not sure how the government will effect that movement.  The latest U.S. Jobs report showed that the net number of new jobs created was zero, but revenues of many companies are up.  What does that say?

Where are the jobs? We have them here!

In June the BCEDC hosted manufacturer leaders from the county to a forum to educate them on training options available through Hawkeye Community College, with a round table discussion that evolved into a great discussion on the employment needs of each company.  What came from that discussion was the conclusion that we have a recruitment and retention problem with our workforce.  Many of our companies are hiring, but they are having trouble finding the kind of workers they need to be successful.  Plus they find that more workers than they would like are not staying employed with their companies because they fail to show up for work consistently. 

Recently I received a call from the corporate vice president of L&M Radiator, based in Hibbing, MN (http://mesabi.com/) and have a location in Independence. She called the BCEDC office with concern about the available workforce in our area.  In July I visited their corporate office in northern Minnesota and learned during that stay I discovered that L&M is not only having this issue at their Iowa plant, but also at the other plants in South Dakota, Minnesota and New Mexico.

For over the last 12-18 months L&M has seen high demand for their product (heat-exchangers for large equipment), and have had a great need for more employees.  They have been running three shifts, six days a week trying to meet demand. They are in immediate need of 20 employees, with the potential need for 75 in the next year. This is a company that offers a good starting wage with a competitive benefits package and opportunities for advancement. 

L&M Radiator is just one of our manufacturers that needs “workers” to help them become successful.  Some of the other contact I have had with local hiring managers are from the Wapsie Valley Creamery, Geater Manufacturing, Iowa Engineered Processes Corp. (IEP) and Bachman Tool and Die and Best Cob.  If you know someone looking for work, or a job change, I invite you to contact these local businesses.

Follow our new blog site, “Economic Development and Partnerships and Progress” at growbuchanan.blogspot.com, for new and archived features from the BCEDC.
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Follow our Economic Development and Partnerships and Progress Blog

Follow our new blog site, “Economic Development and Partnerships and Progress” at growbuchanan.blogspot.com, for new and archived features from the BCEDC.
Also, follow us on Facebook at www.facebook.com/GrowBuchananIowa and Twitter at http://twitter.com/GrowBuchananIA.

Final of Four “fys” – SOLIDIFY

The Process of Four “fys” is not complicated to move through, but it does take a commitment to follow through the method.  The process needs persistence, partnerships and most of all passion to fuel the commitment to take an idea forward.  To succeed at this point in the concept process of starting or expanding a business look back at the three previous “fys”.  A potentially prosperous entrepreneur has IDENTIFIED that their idea is viable and theoretically needed in the market place, has QUALIFIED themselves as the person that wants to take the responsibility and risk to take it from mind to marketplace and they have JUSTIFIED their product idea as a profitable idea by formulating a proper business plan.  Now the entrepreneur needs to SOLIDIFY the idea to move forward.

The final “fy”, SOLIDIFY, is the end of the means.  In this step you are pursuing that one key resource that every business needs, no matter what stage they are in, CASH!  The saying from a movie, “money makes the world go ‘round,” is unfortunately true when it comes to starting a business, and maintaining one too.  Unless you are using personal wealth for the investment, a bank or other stakeholder, they will all want to see by this point that the idea has been thought through, a market has been identified and a most of all plan has been thoughtfully and genuinely put together. 

Once the investment has been made personally or externally, an entrepreneur is on their way to actual start-up.  That is a whole different process in itself.  This is a process that takes more risk, but can very rewarding to complete.  The BCEDC is a local resource in Buchanan County that maintains great relationships with individuals and institutions that exist to help people move business forward, resulting in a growing economy.  If you have questions about how BCEDC can help your business or your concepts please contact us, I will be glad to visit with you.

Nate Clayberg – Director (nate.clayberg@growbuchanan.com)

Manufacturers: "We have people, but where are the workers?"

On Thursday, June 16, 2011 the BCEDC, along with Hawkeye Community College, hosted the Buchanan County Area Manufacturers Forum at Bill’s Pizza in Independence.  I want to personally thank the people from Hawkeye Community College, Geater Manufacturing, Wapsie Creamery, IEP, L&M Radiator and Denton Castings for attending the first of what hopes to be an ongoing session with our local manufacturing community.

At the forum representatives of Hawkeye were able to provide information on job training programs available through their organization, while also taking feedback from those in attendance on how Hawkeye can help with one of their biggest challenges.  That challenge is finding “workers”.

With the local unemployment rate at 6.3% (Iowa: 6%, US: 9.1%) it’s hard to think that our manufacturers are having trouble finding people to work since they ARE hiring.  They are getting people to apply, but they can’t get “workers” for the jobs they need to fill.  We are not talking about highly skilled nor highly paid jobs, many start at $10 to $11 per hour (about $21,500 per year) plus benefits. We are talking about labor positions that don’t necessarily need training beyond a high school degree.

“Workers” are those people that are willing to work in a job that will give them a decent wage for a decent days work. However, the reality is that many of the people that apply these jobs would rather not “work”.  Some of the issues these companies face after hiring is the passing of an initial drug test, employees not showing up for scheduled shifts, workers that show model employment until they qualify for unemployment benefits and the demand from employees to decide work schedules and wage rates.  This is frustrating for our employers in all industries, and is honestly very concerning when thinking that we are relying on this type of workforce to help bring the US economy to prosperity.  There are some diamonds in the rough that will put the time in to earn a day’s wage, but as a human resource officer said last week, they will hire and fire eight to ten people for the same position before they find that one person that turns out to be a quality worker.  That is hard to believe, but it’s true.

What is the solution?  That is probably worth $1 billion.  The solution is the same as the cause.  The mindset of today’s current workforce is mostly developed from these influences: family, friends, community, government, education and the media.  But positive or negative influence can only take place if a person’s attitude accepts it.  Recently a local employer told me that when he hires he looks more at responsibility than accountability. To explain, If you are responsible it helps the person make better decisions on the job.  Accountability is good, but it is usually set externally and is not a genuine gauge of true personality.

Obviously workforce is an issue in many areas of the country, but now is the chance to be different in our area.  The BCEDC cannot, and will not, be the entity that can solve this problem for our employers.  But the Buchanan County Economic Development Commission can work with key organizations to begin to identify ways of improving a challenge that businesses have been dealing with in our existing economy.

Third of Four “fys” – JUSTIFY

In this series we have IDENTIFIED and QUALIFIED you and your business idea.  Now let’s JUSTIFY it as we roll through The Process of the Four “fys”. The justification process is about planning and money.  As any business person will tell you, money gets you started, keeps you going and justifies why you are involved in your own business (AKA making money in business). But before you can even think about approaching a bank, investor or breaking into your savings, you need to develop a business plan to serve as a good tool in figuring out what you want your business become in the short and long term future.  Before any respectable lender or investor thinks about writing a check to support an idea, they will want to see the research to show them that this really is a good idea and most notably a profitable one too.

Entrepreneurs come from all backgrounds, but most of them come from jobs that paid them a salary or set wage.  When you own a business, you get paid only if you have a profitable product.  This is a hard reality that many potential new business owners have to face when moving an idea from their mind to the marketplace.  It is a risk that needs to be thought through carefully, and that is another reason a solid business plan is so important. New and experienced entrepreneur need to justify a start-up or expansion idea as it relates to personal income. Can they pay their current bills and sustain a profitable business if they take the risk of moving forward with the idea?

Starting a business or growing one, can be very exciting, and it can be very frustrating. Not everyone is cut out to run their own business.  But not everyone is cut out to work for someone else.  The BCEDC is a local resource for information or entrepreneurs to take advantage of.  We are here to network you with expert information for business plan development, financing and investment and general business counseling.  Economic Development is about building wealth for our communities, businesses and its residents.  Please let me know how I can help your idea. Next post, the final fy: SOLIDIFY

Second of Four “fys” - Qualify

Last time I touched on identifying a business idea, this week in The Process of the Four “fys” we will QUALIFY that idea.  A good product idea does not guarantee that it will be successful.  To take a product or service to the marketplace you will need the ability to become an expert in that product, thus making you Qualified to plan, develop, market and nurture that idea through its life span.  Many times the entrepreneur who creates the vision for the idea has a hard time being the sole person with the responsibility of cultivating the idea to success.  Having the ability to realize that you need help is a great quality for a business owner that wants to succeed.  Not one person can be an expert in everything, but everyone can be an expert in at least one particular area.  Once you can identify that trait, you will qualify as an entrepreneur on your way to success.

There are great resources out there to help businesses.  These resources cannot be found in books or online.  These are human resources, people that have gained expertise in areas that you may need help in.  The BCEDC is here as a resource for entrepreneurs, if you have questions in moving your idea or business forward we can assist.  The process of developing a business idea can be very daunting, yet it can be rewarding.  It does take some aggression to succeed in any business, but there is also a sense of humility that can come into play as well.  Next week: JUSTIFY