Crain’s Detroit Business
March 7, 2023
Sherri Welch
A new statewide coalition focused on getting the smallest of businesses on the radar for American Rescue Plan Act funding and state policy changes is making its debut.
The New Economy Initiative and Michigan Municipal League Foundation have co-founded the Michigan Microbusiness Coalition with about 20 members, including local governments, statewide industry associations and foundations.
The coalition is working to secure policy change around things like reduced licensing requirements, tax relief during the first five years of operation and a dedicated percentage of procurement for microbusinesses with 10 or fewer employees.
Among other things, the coalition is also seeking the creation of a state office of microbusinesses to help those companies sustain and scale their operations and develop a vision to support the companies with increased technical assistance and peer support.
The goal is to get bipartisan legislation introduced by late spring or early summer, NEI Executive Director Wafa Dinaro said.
A one-year, $96,000 grant from NEI is funding work with Public Policy Associates to help collect data, coordinate meetings of coalition members and lead advocacy work.
“These are all policy changes other states have implemented and have worked really well,” Dinaro said. “These are things we think should be implemented in our state.”
The new coalition, which came together over the past year, was spurred initially by the lack of paycheck protection loans for microbusinesses during the COVID-19 pandemic, Dinaro said. But after benchmarking how other states support those businesses, it’s also taking aim at policy.
“How do policies in place support microbusinesses whether it’s good times or bad times, and how do we ensure their voice is at the table in Lansing?” Dinaro said. “We want to make sure microbusinesses have all the tools necessary to them in order for them to be successful in Michigan.”
The success of local communities and economies is intrinsically connected to those small businesses, said Helen Johnson, president of the MML Foundation.
The Michigan Municipal League and foundation have more than 530 municipal members, she said.
They are all interested in seeing microbusinesses, which number in the hundreds of thousands in Michigan, succeed because they are important to the social, cultural and economic fabric of their communities, Johnson said.
“We know that with the ARPA funding that’s on the table right now in the state and in communities, this is a timely announcement.”
The state has to commit all of the ARPA funding by 2024 and it must be deployed by 2026, Johnson said.
“Making sure microbusinesses are included in the most flexible resources we’ve ever seen in our communities and our state … is of absolute importance to us,” she said.
Members of the 20-group coalition include the cities of Detroit and Grand Rapids, the Council of Michigan Foundations, Small Business Association of Michigan Women Forward, Michigan Small Business Development Center, ProsperUs Detroit, USDA Rural Development, Venture North Funding and Development, Michigan Community Capital, William Davidson Foundation, Community Foundation of St. Clair County, Michigan Economic Development Corp., W.K. Kellogg Foundation, Ralph C. Wilson Jr. Foundation and Northern Initiatives.
Microbusinesses account for about 78.5 percent of all businesses in the country, the coalition said, citing data from the Small Business and Entrepreneurship Council.
Their owners are more likely to be young, women and people of color, Dinaro said.
“As the state looks to increase job growth throughout Michigan, its best bet is focusing on entrepreneurs and small businesses who are ready to create opportunities within their local community,” she said.
Reforms or policy the new coalition will seek include:
- Dedicating a percentage of state/federal funding (contracts, economic development funds) to microbusinesses with an emphasis on those in their first five years of operation
- Reducing or eliminating occupational licensing requirements, permits and fees for microbusinesses, including for home-based operations
- Providing portable health care benefits for workers in transition who want to start a small business
- Providing immediate tax relief for microbusinesses during their first five years of operation
- Improving regulatory flexibility and reducing compliance requirements with regard to crowdfunding
- Creating the Michigan Office of Microbusinesses