Business organization hunting California's small companies

The gold rush is on in California. As part of its 2010 recruiting strategy, Nevada Business Connections will continue to lure small to medium companies from the Golden State to Northern Nevada.

Leaders of the privately-funded economic development organization will conduct a minimum of four missions to California in 2010 to persuade businesses to relocate or expand in Nevada.

Their pitch: Nevada's business climate easily surpasses California's. Nevada ranked fourth in Chief Executive magazine's most recent best business climate survey. For the fourth straight year, California ranked last.

The ratings considered such factors as unemployment, transportation, economy and the overall cost of doing business.

Somer Hollingworth, president and CEO with the Nevada Development Authority, reported that, "Nevada was ranked as one of the states with the most favorable business climates, second only to South Dakota. Nevada was ranked as the state with the least full-time state and local government employees per 100 residents."

He referenced the Small Business & Entrepreneurship Council's 14th annual "Small Business Survival Index 2009: Ranking the Policy Environment for Entrepreneurship Across the Nation."

"Nevada has fewer taxes, less regulations, lower property values and taxes, less pollution, a great lifestyle and a government sympathetic to the entrepreneur," said Kris Holt, executive director of Nevada Business Connections. "The pitch has worked: At least 160 out of 210 companies from California have relocated to Northern Nevada in the past 15 years, and more are coming," he said, citing his 20 years experience in economic development.

The majority of relocating companies are manufacturers in the capital region (Carson, Douglas, Lyon and Storey counties) and most of them are small businesses (10 to 100 employee companies).

"That is the target for us," Holt said.

"Both states have financial pressures, but I suppose California's is worse, and that makes it a tougher place to do business," said Michael Fisher, President and CEO of Synvasive Technologies, a 50-employee surgical instrument manufacturer that is leaving the Sacramento region for Reno.

"Both governments face big challenges. We think ours has a better understanding of the need to control government spending," says Paul Enos, CEO of the Nevada Motor Transport Association.

"They have a declining quality of life in many areas," said Ray Bacon, executive director of the Nevada Manufacturers Association. "California is a much higher cost place to do business than Nevada. Their government has paid its bills with IOUs and may need to do that again. They have increased taxes and regulations and have much greater water problems than we do. They face a litany of issues, but they still are the dominant economic player in the west. Company owners just need to ask themselves if they really need to live there and tolerate the hassles?"

Nevada Business Connections, launched in July 2008, aims to recruit new businesses and assist in expanding existing companies.

During its first 18 months, the organization published a monthly newsletter, hosted monthly networking breakfast meetings and aggressively lured companies to Nevada.

Four recruitment trips were conducted in California during 2009.

"We don't wait for the phone to ring. We follow up on companies by meeting with them on their turf," said Holt. "And we've opened our coverage area to all of Northern Nevada, not just the capital region."

Nevada Business Connections formed its strategy after accumulating and analyzing data with University of Nevada, Reno, on regional industries. The information confirmed Northern Nevada's benefits - such as a strong manufacturing base (1,400) with 20 individual clusters that pay higher than average wages with benefits. A solid potential workforce, fair worker's compensation rates, and an attractive quality of life will help lobby unhappy California businesses.

Nevada Business Connections has offices in Carson City and Reno and currently has 188 members. For more information, visit nevadabusinessconnections.com.