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By Andy Domino | MiBiz
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WEST MICHIGAN — Second-stage companies often find themselves at an interesting crossroads.

They’re ready to continue growing, but they need help to figure out what to do next. All too often, that help for existing small businesses simply hasn’t existed as more resources get poured into helping startup businesses and entrepreneurs.

One of Gov. Rick Snyder’s goals — via the Michigan Economic Development Corp. — is to change that. This fall, the MEDC launched the Pure Michigan Business Connect Economic Gardening Pilot Program to provide business development assistance to second-stage companies across the state.

Seven West Michigan companies are among the 54 businesses selected for marketing and strategy support from MEDC.

Second-stage companies typically have revenue between $1 million and $50 million and 10 to 100 employees. They’re past the touch-and-go years, but they still have plenty of room to grow, given the right resources.

Each company will have a small team of consultants dedicated to it for 35 hours over two to three weeks, starting in mid-November. At the end of the gardening program, a second-stage company should be stronger in one or more of the areas it might not have had the resources to work on in the past, said Tom Rico, manager of sales support at MEDC.

“They don’t have the staff, the budget or the time,” he said. “They’ve shown signs of success; if we can give them consulting services, they can take the next step.”

Rico said the Pure Michigan Business Connect Economic Gardening Pilot Program is based on a similar program developed by officials in Colorado starting in the 1980s. Clients get advice and information in one to four areas: business strategy, customized market research, social media, and geographical information systems. In the latter, consultants identify where a company is seeing most of its sales.

Michigan’s economic gardening program is also getting support from the Edward Lowe Foundation of Cassopolis, which is dedicated to second-stage companies.

“They have never tried this technique (in Michigan) — the governor decided, ‘Let’s give it a try,’” Rico said.

A total of 54 businesses were selected for the pilot. Nicole Whitehead, a project manager at MEDC, said 78 companies applied for the program. Participants were narrowed down to 54 to make sure a variety of industries and regions were represented.

“We hope the other 24 are part of the program next year,” Whitehead said. “We had a few companies express real interest once they knew what we were offering.”

MiBiz spoke with four of the West Michigan companies receiving grants to find out what each hopes to do with the additional resources.

Proos Manufacturing

The economic gardening program is not only supporting high-tech companies, but also traditional firms looking to grow. Proos Manufacturing Inc. of Grand Rapids was founded in 1919, working in sheet metal fabrication and metal stamping. CEO Amy Engelsman is the third generation to be involved at Proos.

“We’re about 35 percent into automotive now,” she said. “Medical and defense — we need to find a way to get into those markets.”

In 2007, Proos was considering expansion but put those plans on hold after the economic downturn, Engelsman said. Business has been steadily coming back, she said, and now Proos has 77 employees. This fall, the manufacturer added a 30,000-square-foot facility just five miles from its 60,000-square-foot property, but the next step is to go international.

“If I’m going to expand this business, we need to go outside the state,” she said. “It’s important to keep diversifying.”

Proos heard about the economic gardening program from the Michigan Manufacturers Association. Engelsman said the company has had success thanks to support from the Michigan Small Business and Technology Development Center and thought it would find the same kind of help from the MEDC and its partners.

“I’m looking for education on how to get into other markets,” Engelsman said. “The state gives you resources and information, but it’s your responsibility to take that information and do something with it.”

Atomic Object

Carl Erickson, president of Atomic Object LLC of Grand Rapids, said his company’s job is to make other companies better.

“We help develop products for other companies, to improve their own business and make their product more efficient,” he said.

Atomic Object creates Internet software for activities as straightforward as improving the machinery processes in a factory to navigating through Grand Rapids’ ArtPrize competition. Another product is “Catalog Choice,” a kind of do-not-call list for paper catalogs sent through the mail. Still another is a program that helps find doctors in the Spectrum Health system.

This year, Atomic Object marked 10 years in business. It currently has 32 employees and had revenues of $4.8 million this year, up from $4 million last year. Erickson said he is optimistic for the company’s future. Atomic Object’s staff is already scheduling work orders for the second quarter of 2012.

The nature of software companies lends itself to cooperation between working teams, and Erickson said his employees are all in “one big room,” where they can share information and collaborate freely. But Atomic Object is bursting at the seams. He’s considering either purchasing an equity stake in another company or opening a new office, possibly in the Detroit area.

“It’s a contrarian play,” Erickson said. “Most other companies would go to obvious places like Boston or Colorado Springs (Colo). I’d like to help with the revitalization of Detroit.”

Before taking that next step, however, Erickson said he needed to do more research. That’s what he’s hoping for from the economic gardening program.

“We have an idea, but haven’t done our diligence on that idea,” he said.

corePHP

Like Atomic Object, Battle Creek’s corePHP is a software company, but its business is all based around Joomla, an open-source system for publishing material online. The company boasts clients from “mom and pop places to KFC” located from the U.K. to Battle Creek, said co-owner Jonathan Shroyer.

Shroyer likened corePHP’s offerings to the apps available on iTunes, though its products can still “talk to one another” after they are downloaded. In addition, corePHP can help clients with all the visual elements of their marketing — not just software, but also a website and even business cards, if needed.

The company, founded in 2006, has 15 employees and hopes to double that in the next year. Shroyer said he wants the company to offer its own products too, instead of simply helping other businesses. One plan is to offer e-commerce, such as shopping for corePHP’s products at corePHP’s site.

The economic gardening program came along at just the right time for his business, Shroyer said.

“We can get someone devoted to marketing,” he said. “Once you identify the market, it’s going to produce things you can use.”

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TAGS:

• atomic object
• corephp
• michigan economic development
• nicole whitehead
• proos manufacturing
• rick snyder
• west michigan