Welcome to an insightful conversation with Jordan Howard, the Strategic Alliances Manager at Intrepid Finance, and Brian Wahl from Business Growth Consultants. In this engaging video, Jordan and Brian delve deep into the world of business incentives and strategic finance. They explore the transformative impact of incentives on business growth, the intricacies of site selection for maximizing benefits, and the untapped opportunities in various state and local government programs. This discussion is a must-watch for entrepreneurs, business owners, and finance professionals looking to navigate the complex landscape of financial incentives and growth strategies. Get ready to gain valuable insights from two seasoned experts in the field of business development and finance.
Jordan: Welcome Brian. Appreciate your time really looking forward to digging in to kind of you know, figuring out all the interesting things you’ve got going on. But I guess you know before before we get started anything just kind of give us a little bit about your background and your experience and what led you to start BGC.
Brian: Absolutely and thank you Jordan for this opportunity. So back in the early 2000s I used to be in the structured finance world and I worked with a lot of growing businesses that were looking for new financing for acquisitions, maybe refinancing for existing operations and investments, and so forth. A lot of those projects had some indirect exposure to incentives. We weren’t actively pursuing them but I started to see these incentive programs and they’re very beneficial to these clients and I started realized while this is a true value, a and know a lot of these businesses are taking risks, they’re growing, they’re making impacts, they’re trying to get financing, some of them could, some of them could not. But the incentives were great because they were all adding jobs and making investments which are triggers for incentives. And so I was like started thinking I really want to focus on this incentive world. So I made the kind of transition out of the finance world into incentives in the mid to late 2000s and have been focusing 100 percent of my time since then working with growing businesses and and pursuing incentives.
Jordan: Is that is that kind of when state and local government started really utilizing incentives or they’ve been around for years prior to that? And that’s kind of when you just started noticing them?
Brian: They have been around and there’s been a lot of changes and you know, each year there’s there’s changes in legislation, it varies by state. You know some states are have gotten away from offering incentives and then they got burnt, so now they’re coming back to offering incentives. Some are more aggressive than others certainly and more supportive to the business world than other states, but they were around. But it’s probably just my lack of understanding of the incentive world at that time.
Jordan: That’s like a problem you deal with with clients now right because a lot of clients don’t. They were like you back then, they they didn’t know that there were these options were out there or they thought they were just for big for big companies.
Brian: And not just back then, but but today for sure.
Jordan: Yea. I think it would be helpful like one of the other things that you do not just with the incentives is you also help? You know you’ll help a site selection based on incentives. So you’ll go around and you’ll help somebody say. Hey, it’s better to. You know we can get better incentives if we switch counties or if we switch states and you do that and you kind of package everything in with incentives. So I think it might be helpful. People just kind of hear like an example of a project where you like kind of went in and like know you did above and beyond. Maybe even you thought you’d be able to get from like changing a site, using site selection to kind of get incentives.
Brian: Absolutely. And those were you know. The more complex projects do require a site selection component, a cost comparative analysis of different business factors, and then the incentives procurement side, and those are the ones you read about in the paper right. Those are the large you know. Ten plus million dollars in investment, 100 of jobs and so forth. Relocations. You know, from one state to another or expanding into a region.
And you know, a good example. I have a client out out of the West Coast who occasionally opens new distribution centers and they would come to us and say. Okay, you know, we’re looking at multiple states right now and trying to narrow down our options. You know, how can you help us? And we’ll start looking at different sites in the cities that they’re interested in and of course, those states. And the goal is to narrow down those options to one or two options. And then we can go out and actually pursue incentives to apply to that analysis. In the end, but we start by, let’s narrow this down and see what makes the most sense and we’ll do a cost comparative analysis. We’ll look at available labor. We’ll do a labor analysis, you know, you’re looking for jobs and we want to make sure those jobs exist. You know if it’s a significant number and what are the average wages of those jobs in that marketplace? You need, you know, companies need to know that to, you know, if they’re higher than what their business model supports. Then we want to know that if they’re lower that could be a good thing because they can poach and offer higher jobs. So we start there. We look at the tax climates in the states we look at, you know, transportation you. What kind of exemptions. Tax exemptions do the states have if you carry a significant amount of inventory, one city or state might not have an inventory tax, so those are the you start there and then we get it narrowed down to know a couple different locations and then we then we reach out to the contact of the city, the contact at the state. There’s an energy significant amount of energy being used. Well bring those folks and we will present to those folks in a transparent way. You know what we’ll look at. Five-year projections on new jobs? How many jobs are you hiring? What are the average wages? What’s the capital investment in personal real property? You know. If there is energy tell us about that you know your energy projections but then we can quantify the impact that project is going to make on the state and local economy and we’ll share that with our contacts from the governments and as I mentioned we’re transparent so we want them to know, hey, we’re looking at a couple different options and this is why we’ll be transparent throughout that whole process. So that really helps, you know, narrow down the options for the client and then it transitions into the negotiations of the incentives which ultimately you know our goal is to maximize those incentives to offer to our clients so they can plug that to their analysis and make their decision.
Jordan: That makes a lot of sense. What about. What about five to ten years after somebody gets incentives like what’s a good success story where you’ve seen somebody that’s been able to get? You know, incentives to help build U, you know, build their company, build their staff, build their, build the facilities that they have. And then five the ten years down the road just flourish like you have a good example of that you could give us?
Brian: Absolutely. You know, it all depends. You know, we work with clients in all different. Phases of Growth. Right. We might have a startup company that doesn’t even know if they’re going to be around in one or two years, or you might have a fully established company that wins a new contract. And like the example I just shared with you, they know they’re going to be growing in that area. So we have, let’s call it a phase one of incentives that they receive. And of course, we help with the annual compliance to make sure they realize those incentives. As a lot of these are incentives offered on paper, but they’re performance based, so you have to perform it. You know, you got to add those jobs and make that investment to trigger, you know, the realization of that award. So we help with that. So you know, let’s say that’s phase One and we might be hat, you know. three, four years into a Teeny Year award with a client and. Things are going very well and they decide, wow, you know, we need to add another 50 or 100 jobs or we’re going to make an additional investment in new equipment. Or now we’re going to go buy a building or build a building. Maybe we’re leasing before well, so let’s sit down and talk about it and let talk about the growth plans. What do those projections look like? And then are you merit? Is your focus going to be at your current location or are you looking at another state, another region for logistical purposes? Maybe they have a client based out that in the Southwest United States and they want to look there. It’s never. I don’t want. I never want to say never. But we haven’t seen a case where they’re saying we’re going to move our existing operation to phase one. But this is a phase two and we’re just trying to decide. Are we going to focus that growth at this first location or look at some other options in other states? So. I think a lot of companies think that you know they receive that first round of incentives and that means they don’t qualify down the road but they do. And that you know that’s with, you know, a project expansion now keep in mind. Also at the state level and sometimes at the local level, there are some programs that are approved through legislation, maybe a training grant or a grant for high-tech manufacturing. And it might come, you know, with a first come, first serve basis, and you know, within two months it’s going to be allocated well when we see those you know, we look at them and you know what type of businesses they they are applicable to, and any of our clients that fall into that that might qualify will reach out to them and say. Hey, you know, here’s an incentive that just popped up. It’s going to be gone in two months, but you know, we think you’ll qualify based on your your growth initiatives and so forth. So let’s go after that one. So that’s an additional value. After the fact of that first phase.
Jordan: You’ll work in any state. Right. I mean, you, you can work mean. I think I would imagine prominently most of your works here in Indiana. Right, but you, you can work outside of the state of Indiana, and how how often does that happen?
Brian: We’re base here in Indiana, so a lot of our work is here. We do a lot in the Midwest just because of a lot of our referral contacts and clients that we worked with. Maybe they have, you know, more of a regional company might be looking at Louisville or you know. Cincinnati. You know. Tennessee. Some of the closer states for regional growth.
Jordan: What are some of the like? What like? Give us a range of like? What types of incentives you’ve seen people get. I mean, I’m sure there’s a wide range right like. Give us kind of like, what? What’s what do those bookends look like?
Brian: Qualifiers, for instance, vary in every state right. Some states you have to have a minimum number of jobs. Before you can qualify for incentives, some have a minimum average wage requirement. So you know we’ve had a couple projects, our smallest projects, oh, when they meet that minimum criteria might be around a 100 thousand dollars savings. And that’s on a small side, that’d be a company that’s just hiring some folks and not making an invest, you know, at lease in the facility, not buying equipment. So there’s nothing that qualifies from the investment standpoint, but the jobs only maybe ten to 15 jobs, but that could be, you know, 100 around 100 thousand dollars savings. And to some companies that’s a significant savings. You know the higher end you start getting you know when know when I use that example earlier and you have a client that’s creating 500 jobs and spending 4050 million dollars and using energy. You know, you know you’re getting incentives from the state local from all over and they’re creating some significant taxes, property taxes, withholdings, taxes. Those could you know be 3040. 50 million dollars in in in awards, so they’re all over the board. We don’t see a lot of those right and around here. A lot of small and medium size businesses. You know, so that 500 thousand to a couple million seems to be, you know, pretty consistent here in the Midwest on that for that small and medium size business.
Jordan: What’s the advantage of a company? You know, using using partnering with you to help out from an incentive standpoint versus just trying to go and do it on their own?
Brian: We’ve had clients that had good relationships, you know, on the local level. Maybe they, they know the local economic development folks maybe know the mayor, and maybe even get some incentives from them. But did they get all the incentives out there? You know, were there some incentives from the state that they didn’t know about? Did they qualify for energy related incentives? Did they maximize those incentives locally? You know, maybe they receive something, but, but I would contend that rarely, if ever, do they did they really maximize those incentives? They don’t maybe know how to position it. They don’t know what to ask for, you know, because a lot of times these projects really hinder these companies need that additional. Economic assistance to grow and we want to share that with the city and state folks because everybody wins. And if you can help these clients through the incentives then you know they’re going to put that money back into their company and buy more equipment and add more employees and train these employees. So we want to make sure that we’re really. Maximizing the potential to get incentives because that’s going to help that company maximize their potential growth. So there’s no doubt that that I we’re gona and not just us, but any incentive consultant. I have no doubt almost 100 percent of the time do a better job of maximizing the incentives, but they’re also going to find other incentive programs that a business owner just might not know about. And then there’s ongoing compliance. We know we have very many examples of companies have received incentives. There’s annual compliance, and you know, maybe you have an HR director that left or an office manager that was integral and left, and they they forget to follow up on an annual basis with their compliance. And they don’t receive their annual awards. So you know, there’s been quotes of 40 to 60 percent of incentives. Go. Untouched because the compliance is never completed. So yeah, so so we have on the says bad. I mean, that’s. Money you’ve already been offered. You know, you’re performing like performing like you said you did so, but you forgot this major this last step. So that’s something we help out with.
Brian: Yeah, that’s a Big Woopse. Right? We’ve had a handful of clients that hired us on that received in sentenceives in the past, and we we kind of did a review of their past and found out that they had unuch training dollars that have expired. That’s never a fun conversation or for business owner to find out about
Jordan: right, right. Well hey man, i really appreciate your time today thanks for joining me, you know. I think that you know the services and I personally I’ve worked with two companies that have taken incentive money and it was transformative. I mean, it really helps it helps from a cash flow perspective. It helps from a growth perspective. I mean, like Brian said, like any size company can get this like there’s a lot of people out there that just think like Oh yeah, you’ve got that money. All goes to Eli Lilly. No, it doesn’t it? It goes to companies that you’ve never heard of here locally and you know and really across the country. So if anybody in my network would like to be connected to Brian, feel free to reach out and i’d be happy to make an introduction and really appreciate your time and thanks for what you’re doing for the small business community. Brian.
Brian: Absolutely and I think the the parting message I want to leave here with at the end of the day, there’s a lot of business owners as we’ve said that don’t realize they qualify if you’re a business owner, if you have a client that is adding jobs, they’ve been adding jobs over the last couple years and that trend will continue. Let’s look at the next five-year future growth so that organic growth is something we want. We want to talk about and acquisitions. Certainly when companies are making acquisitions, those are missed out opportunities all the time and it never hurts to chat. You know, in a ten or 15 minute conversation, we can determine very quickly, better yet if it does, if they don’t qualify today, at least that business owner walks away. Knowing a little more about incentives, knowing what not to do in the future to jeopardize getting incentives, and we leave them with a blueprint for future. For future growth that that they can remember. Hey, maybe we need to talk because we are adding jobs or buying, you know, some new equipment.
Jordan: It’s just found money, it’s found money
Brian: That’s right. And the best part. We didn’t even talk about this. The best part is you get paid out of what you save. So you don’t like it’s A. It’s an easy call to make with you if you’re not, if you, if there’s not a savings opportunity, then you know, people aren’t going to owe any money. That’s right. Yep, we’re a contingency fee. And after we we do the analysis and provide estimates, we’ll give a agree to a percentage. If we’re not successful, we don’t get paid anything, you know, we, but we know typically going into it whether or not we can bring value. But yeah, if we don’t bring value, then we don’t get paid. And if we do, it’s a percent and our fee comes in over time, just as the client’s incentives come in over time. So we take that risk with them as they grow and receive their incentives, and that triggers our fee. So that way, you know, we’re not charging them up front and potentially they don’t perform and they’d be out of that money. So we’re very flexible with our fee structure.