Brothers Galen and Sennen Conte found no shortage of support as they built their Johnston food company from $150,000 in sales in 2006 to a projected $5 million this year.
Sennen Conte praises the Northern Rhode Island Chamber of Commerce and the R.I. Small Business Development Center for the assistance they offered the businessmen as they grappled with the growth of Gerbs Allergy Friendly Foods.
“There are a whole lot of resources [for business development] in the state that people don’t know about,” Conte said recently.
For that reason, nobody needs to convince Sennen Conte that Rhode Island is fertile ground for small businesses. Now a recent analysis of U.S. Census data by a financial website appears to support his belief.
The analysis, conducted by MagnifyMoney.com, ranked the Providence metropolitan area No. 4 among the top 50 U.S. metros in an assessment of how dominant very small businesses – companies with less than 10 workers – are on the economic landscape in those areas. Miami, Los Angeles and Tampa, Fla., ranked ahead of Providence.
‘There are a whole lot of resources [for business development] in the state that people don’t know about.’
SENNEN CONTE, Gerbs Allergy Friendly Foods co-owner
The ranking was based on metrics gleaned from information collected in the U.S. Census Bureau’s 2015 and 2016 Survey of Entrepreneurs:
• 74% of Providence area businesses have less than 10 paid employees. The average among the top 50 metros was 72%.
• 11% of workers in the Providence region are employed by very small businesses. Miami was highest on the list with 15% while metros such as Louisville, Ky., Cincinnati, Milwaukee, San Antonio and Las Vegas were lowest with 7%.
• The average payroll per employee of very small businesses in Providence is 87% of the relative metro average, compared with 79% of the metro average for all metros in the study.
While very small businesses may be more dominant in the Providence area, Chris Sheehy says it doesn’t mean that it’s an environment in which they can thrive.
The owner and sole employee of Sidewalk Branding Co., a marketing firm in East Providence, Sheehy gushes that “Providence culture is great and vibrant.” But it’s the high cost of health insurance – for his company, $25,000 a year – that is squeezing him and sapping his potential retirement savings. Health care costs were not a factor in MagnifyMoney’s ranking.
He said the state should take action to ease the burden, such as offering affordable insurance across state borders, which would be helpful in his family, with an out-of-state college student.
Right now, Sheehy said, his choice of health insurance companies in Rhode Island is too narrow compared with other states.
After his younger child graduates from high school, Sheehy said he might leave Rhode Island behind.
The conditions of very small businesses are tied to what’s going on in the local economy, said Edward Mazze, distinguished professor of business administration at the University of Rhode Island.
They can be buffeted by outside forces such as changes in the minimum-wage laws, the availability of an educated workforce and even tragedies such as the 2003 Station nightclub fire that led to changes to fire codes.
Mazze said the state is working on ways to help, such as reviewing and streamlining regulations, offering some tax incentives and helping to train workers.
Ed Huttenhower, state director of the R.I. Small Business Development Center, said the state is trying to be more helpful by making business registration on the Secretary of State’s Office website easier to use.
Liz Tanner, director of the R.I. Department of Business Regulation, is aware of the frustrations felt by small-business owners. She said most of the problems stem from poor customer service, clunky processes that force people to ping-pong from one office to another, and simple lack of understanding by businesspeople of what the state expects from them.
To ease the situation, Tanner said in recent years the state has eliminated one-third of what was deemed excessive pages of regulations.
Also, since 2016 Amica Mutual Insurance Co. in Lincoln has provided free customer-service training for upward of 4,000 state employees.
And through a lean-management process, the state has drastically reduced the number of days now required to complete many of its procedures, such as getting a letter for good standing.
Tanner’s favorite improvement: Applications for building permits and fire-code inspections can now be submitted online, and the municipalities and state share the information.
These days, Tanner said, she has to go looking for complaints because fewer are coming into her office.
At Gerbs Allergy Friendly Foods, Sennen Conte is thankful for the support and coaching offered by other Rhode Island organizations.
Gerbs began in 2003 as a producer of a favorite family recipe of pumpkin seeds. By 2009, the company had moved into making allergen-free foods, and it now has 10 employees and distributes 300 products, such as granola, trail mix, seed butters, dried fruits, coffee and flours.
The R.I. Small Business Development Center has been especially helpful.
“They have amazing resources for small business,” Sennen Conte said, noting that the center has helped Gerbs with “procuring ingredients, forecasting and scheduling.”