North Carolina has long been known for its manufacturing prowess in the textile, agricultural and furniture industries. The Research Triangle Park also is the state’s technology hub and is home to IBM, Cisco and other industry leaders. However, the state’s dedication to small business has created greater opportunities for owners beyond those sectors—including professional services and healthcare—as they operate in a more diverse and dynamic economy.
Scott Daugherty, North Carolina’s commissioner for small business based in Raleigh, discusses the state’s small business climate.
Q: What makes North Carolina a place where small businesses thrive?
A: It’s in a good location because there is easy access to about 40 percent of the U.S. market. We have two state ports to move goods in and out of the U.S. and excellent interstate highways—we’re crisscrossed with I-95, one of the heaviest traveled highways in the country. An overnight truck delivery radius is typically 500 miles. So from almost any place in North Carolina, you can access much of the eastern seaboard and many big cities in the Midwest.
Another reason is, although corporate taxes are on the high side, property taxes and inventory taxes are among the best in the country. We also have a large community college system, which does a lot of business and industry-related training, leading to a highly skilled work force.
Q: What are some advantages for small business owners in the Tar Heel state?
A: We’re the only state at this point whose department of commerce has a commitment to small business. This has allowed us to put a senior staff member—which is my role—in the commerce department who’s there to represent the interest of smaller companies.
The state also has a partnership between our community college system and our university system, and collectively they provide small-business-assisted services to both microbusinesses and mid-size companies that include consultation and help in finding capital. Between them, they probably have more than 75 offices across the state and several hundred full-time business advisors employed by the universities and colleges to work with small businesses.
Q: What are key challenges for North Carolina small business owners?
A: A lot of smaller companies have had to sustain their businesses through the recession, and there was a reduced amount of start-up activity, which is now starting to pick up. The values of real estate have declined, which makes it tougher for small businesses to access capital, since homes and other real estate are most often the collateral they have to offer lenders.
That said, I do think there’s been a very positive increase in the level of capital access, and that’s reflective of improvements in the economy.
Q: Is manufacturing still a prominent part of the state’s economy?
A: We’re seeing a new age of business, in which companies use more technology and science to make products. There are 11,000 to 12,000 manufacturing companies in the state, and many of them have fewer than 100 employees. We also have a prominence in life sciences, in part because the major research universities we have, as well as the aerospace industry.
Q: Which industries are booming in North Carolina?
A: The largest business sector for small businesses is going to be in services, which can range anywhere from maintenance services to technical services, where you have a small firm providing IT or engineering services for larger companies. Also, the healthcare sector is one of the fastest growing sectors across the country, and there’s no exception here in North Carolina.