Wisconsin Department of Commerce Newsletter
December 2006
Wisconsin vs. Minnesota: One Small Business's Choice

More than 15 years ago, I started my company in Minnesota and we grew and developed our capabilities over the years.

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Our product is precision injection molded plastic gears. We design, inspect, mold, and test them. Over the years we have become a leader in the development of this new technology. Still, our company is very small. There are only nine of us at present, although we are all quite technical. There are no minimum wage positions in this company.

Three years ago, we were leasing a 3,000 square foot facility in Centerville, MN and bursting at the seams. We needed to move. We had the usual small business dilemma: a reasonable income, a history of paid bills, some cash in the bank, but no extensive line of credit nor deep pockets. As we considered building a new facility, we looked all over Minnesota. I didn't want to leave the state. We looked for small communities close to the Twin Cities in the hope of garnishing some state aid. We had heard of TIF (tax increment financing and the JOBZ (Job Opportunity Building Zone) program, but weren't sure what they meant or how they worked.

We found a site in Chisago that would have suited us well, but it just never panned out. The city would sell us the land for $100,000. We were never sure exactly how much we would need to invest in roads and services. It seemed like an impossible risk. I called state senators and even tried to reach the governor for assistance. A few of the senators called back. The governor never even acknowledged my calls or letters.

Then we crossed the border to Wisconsin. In New Richmond we were treated as honored guests. The city's development director took us to the industrial park and showed us a perfect spot for our new building.

He explained TIF and what the city and the state would do for us. We met with city and state officials and discussed the details of the project. We found there was much more help available as well for small businesses. In short, they made us feel wanted while Minnesota wanted only our money.

We did not build in New Richmond after all. We found a perfect existing building for sale in Grantsburg. We purchased it and moved in over two years ago. There were no ruffled feathers when we made this change at the last moment. Everyone was aware of our needs and the resultant decision. They all continued to help us.

Since moving in, the support is still amazingly strong. We have been given a grant to help us attain ISO 9001 status. We have been approved for a low interest loan for the purchase of unique inspection equipment that would be difficult to borrow against commercially. There are training grants available. U.S. Sen. Russell Feingold, D-WI, has visited the area, listened to my concerns on outsourcing, and keeps me informed of his efforts in this area.

In short, my company left Minnesota reluctantly, but Minnesota never gave the slightest bit of encouragement. Now that we are in Wisconsin, I wonder why it took us so long to make this decision. That is the difference between these two states for this small businessman.

-- Rod Kleiss, president of Kleiss Gears, Inc. in Grantsburg

Date: 10/8/2006 - BusinessNorth Publications (www.businessnorth.com)

The newsletter is issued electronically every other month.

Please send comments or questions to Barbro McGinn, editor.

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