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Looking up: 5 W.Va. cities scored among ‘Best Small Cities to Start A Business’


The State Journal

CHARLESTON, W.Va. — After commuting to Pittsburgh every workday for 12 years only to be laid off from his research job, Dave McFarland jumped head-first into the realm of entrepreneurship: He opened a gourmet popcorn shop in downtown Wheeling, a fun business model he’d discovered during his working-for-someone-else days in the Steel City.

McFarland, who had an MBA he never used in his back pocket, said he was surprised — not by all the planning that goes into a successful small business, but at how easy it was to get to the starting line.

“Everybody in Wheeling, administration wise, was super-supportive,” said McFarland, who won an entreprenurial pitch contest at West Liberty University. “They were very helpful; I had no problems dealing with anybody in city administration. I was kind of shocked by that. I really expected more difficulty and delays to happen, but we had a date we wanted to open and we were able to open on that date. From (working with) the landlord and getting inside, to getting it renovated and (equipment in place), all the licensing approvals … I was surprised at how easy it was. It seems like it should have been harder.”

And years ago it would have. But that was before city officials used their status as one of West Virginia’s original “Home Rule” cities to reduce all the red tape involved in starting a new business. The new, entrepreneur-friendly system starts with applicants completing a preliminary questionnaire and business license assessment sheet: A step-by-step, let-us-help-you-cut-through-the-bureaucracy that includes a departmental sign-off sheet plus 10 questions the applicants answer to accelerate the application process, along with tax information and the actual new business permit application.

“The city reduced the number of permits required,” said Wheeling Area Chamber of Commerce President Erikka Storch. “Streamlining the process reduced a lot of the red tape for people who previously were intimidated by the process. We have a lot of good resources: The Wheeling Convention & Visitors Bureau, Wheeling National Heritage Area Corp., the Chamber and the Regional Economic Development Partnership. We all partner together on various projects and share information.”

All that has helped Wheeling become one of WalletHub’s “Best Small Cities to Start a New Business,” which ranked 1,261 small cities with populations between 25,000 and 100,000. WalletHub, a personal finance website, compared business environment, access to resources and business costs to determine the best — and worst — for starting new businesses.

The results: West Virginia had five cities ranking above 500, with Wheeling at No. 61; Huntington, 216; Morgantown, 318; Parkersburg, 417, and Charleston, 493.

“I would say it’s encouraging to see the outside world taking notice of the opportunities we have here in Wheeling,” Mayor Glenn Elliott said. “One of the things I’ve always said is the city hasn’t always been its best advocate. For example, about 15 years ago when Orrick, Herrington & Sutcliffe was looking for a place to do a back-office operation, they looked at about 30 different cities across the country.

“We made their Top 30, but I understand we wouldn’t have made the final cut but for the fact that the CEO at the time was from the area, and (told his people) they might want to take a closer look at what’s on the ground here because numbers don’t tell the whole story. Sure enough, now they’re here and they employ about 400 people in what used to be an old abandoned factory. It’s a real success story, one that’s emblematic of how the rest of the world doesn’t realize what we have here.”

What the city has is a tremendous stock of office space and a surplus of older warehouses that can be retrofitted quickly and cost-effectively. Aside from lower business costs, Elliott points out Wheeling has a low cost of living.

“I lived in the D.C. area for about 15 years, so I have those prices ingrained as normal,” Elliott said. “But when you come back here, you realize you don’t have to make six figures to live a very, very comfortable life. Taxes are not that high, goods and services are not that (expensive). It’s an easy place to live; it’s also a very safe place to live.

“One thing I think we’re lacking, and we’re focusing on it right now, is parks and recreation. We have two great city parks, but our neighborhood playgrounds have fallen into disrepair. That’s a big selling point for young families with children. Some of the younger generation, they pick where they want to live first and then look for a job.”

Jewel City riches

Huntington Mayor Steve Williams said the difference makers in his city have been everyday community visionaries — residents who see empty storefronts as an opportunity to reshape the downtown.

“Over the last five years, except with Pullman Square, the principle development is by individuals from Huntington, not some outside conglomerate coming into town to buy,” Williams said. “The Legislature needs to decide if it wants to talk or if it wants to be an actual partner in development in the state. As much as they talk about budget concerns, they need to decide if they want to be a player — and if they want to be a player they have to pass the historic tax credit so people have an incentive to invest in their communities. That money that’s invested then begins to re-circulate in the area, and that prompts investment in startups.”

Williams said his community needs to start training people in how to create jobs.

“It sounds simple, but it’s not. Once you do that, you create a foundation to our local economy so decisions are made here, so we’re not depending on investments from outside,” he said. “As we start to do that, we’re not going to be subject to the whims of economic winds elsewhere.”

Williams said his city “needs to be better” than No. 216.

“Wheeling is 61st, that’s a testament to what they’ve been doing to encourage entrepreneurship,” he said. “In my opinion if we’re going to be a serious contender in international markets, we have to be in the Top 100, preferably the Top 50. When we have a culture that encourages startups, then you’ll start to see all sorts of other things occurring.”

Educational assets

New Morgantown City Manager Paul Brake figures being home to West Virginia University is one of his community’s strongest assets.

“(It’s) an economic engine,” Brake said. “They have a robust business incubator program that helps nurture startups. The university not only provides an opportunity for a clientele, but also an educated workforce. That gives us a strategic advantage.

“There’s certainly room for improvement,” he added. “Certainly you want to have a business-friendly environment, to nurture and grow companies so they can grow and expand into other markets. Morgantown is a great place to do that. We have very favorable attributes — we have an educated workforce, low unemployment, a proximity to Pittsburgh and even Washington, D.C. We’re in a very strong region in the country, so to some extent it’s no surprise.”

But Brake said offering “ombudsman-type services to guide individuals looking at starting a business through the permitting process, technical sorts of services to help (entrepreneurs) develop a business plan, different options for financing and aggregated data for startups showing customer buying habits and the potential for tapping into new markets, and coming up with good analytics so they understand their competitors” could tip the scales.”

“We’d like to crack the top 100, but being No. 318 is a good start,” he said.

Revitalization rewards

As a small business owner himself, Parkersburg Mayor Tom Joycesaid he’s always felt Parkersburg was “a great place to live and work and do business.” Claiming 417th place on WalletHub’s list is just icing on the cake, he said.

“It’s fantastic,” he said. “I think it speaks to our community and its leaders; not just me because I’ve only been doing this for seven months. It’s the folks on City Council, the development department they’ve worked their tails off, they’re real go-getters.”

He credits Parkersburg’s success to a “focused revitalization” in the downtown area.

“We’ve made great improvements but we still have work to do,” he said. “The city has partnered effectively with several groups, like Downtown PKB, which is dedicated to the redevelopment of the downtown, finding tenants, helping coordinate events. I think we’ve had 11 or 12 new businesses open downtown just in the last year restaurants, antique shops, salons.”

“We have a cooperative environment,” Joyce said. “I’ve only been mayor for six months, but the city really tries hard to work cooperatively with business owners and prospective owners to try and help them find the right location. We do ‘courtesy walk-throughs’ with them so they know, up front, what they will need to do to the building. I think that’s been a really good thing.”

He said cooperation and community involvement are key.

“We’ve been fortunate to have some private investors,” Joyce added. “One individual has rehabbed at least a dozen buildings downtown over the past 20 years. Another has done two fantastic buildings recently and is working on a third. It boils down to creating an environment that is not restrictive.”

Joyce also said he likes that with all the bad press West Virginia has gotten over the years, Parkersburg is placed high on any list.

“I’ve long believed that, in spite of what you read in the national media, West Virginia has enough coal to light the world, enough gas to heat the world and enough brains to run the world,” he said, adding that public servants and politicans tend to be lightning rods for criticism, “but if you ask longtime businesses and business operators, Parkersburg’s been good to them over the years. Not just the city, but the community in general. This community is really good about supporting local businesses.”

Hip, historic

Matt Ballard, president and CEO of the Charleston Area Alliance, said since 2008, when world financial markets tumbled, “I really think we’ve been a lot more focused on building an entrepreneurial support system and ecosystems.”

“We have an entrepreneurial bootcamp for startups to someone who’s been in business for five years,” he said. “We have crowd-funding programs, programs to help small business and startups access federal research grants … none of that existed 10 years ago.

Ballard said there is a chicken-and-egg debate, but you have to have the pipeline of entrepreneurs coming to groups like his for assistance.

Ballard said access to financing is still an issue in West Virginia, “particularly in the early stages.” He said entrepreneurs need more “seed capital-type programs” to help fledgling companies and executive-in-residence programs to help mentor new business owners. He also urged development of an entrepreneurship minor in college to spur business students to think like entrepreneurs.

“But creating success, creating a cash flow, making a profit and adding employees — those require additional external help,” he said. “A lot of times a small business owner may be hesitant to seek advice.”

Improved access to financing is crucial, Ballard added. “A lot of people call it the ‘valley of death. Maybe a business is up and running, but to take it to the next level, they need money for expansion or inventory. … We need to have additional programs for that.”

He said a recent trend, and one that bodes well for all West Virginians, is millennials who come home to start a business: People like Katie Rugeley, who started Virginia Lee and TheInitialedLife boutique in downtown Charleston, and Morgan Richards, who creates leather accessories in her shop, Morgan Rhea, and sells them all over the world.

Richards, whose work has twice been featured in British Vogue, as well as InStyle, studied at Savannah College of Art & Design, then won a contest that took her to NYC to work at Coach, the luxury fashion company known for its handbags. Her small-but-successful company sells nationally and internationally, though she’d like to build brand recognition. “Just like any company, there’s always room for growth,” she said.

“I came back home, to do what I do here, because I could have the support of the community and family,” she said. “I could have stayed in New York City, but I wouldn’t have had the support of my community. I would have been just another accessory designer. Pretty much everyone has supported us so far. It’s been great coming back here.”

That doesn’t mean it’s all been smooth sailing.

“It’s hard, because I don’t have the sourcing here that I would have in New York,” Richards said. “There, I could walk down the street and find leather, find the hardware or zippers I need. In West Virginia, I have to search for them. One day I was looking for a buckle but it couldn’t be found. It’s the price I pay, but it’s outweighed by being home.”

The Charleston area, she said, “is a wonderful environment,” and she credits groups like the Charleston Area Alliance for holding her hand through the startup process.

“I always tell people West Virginia is the best-kept secret,” Richards said. “I feel like people don’t get the best view of West Virginians, who we really are. But being here, living here … it’s a beautiful state. There’s so much inspiration here that people don’t even see — people are nice to each other, they’re supportive.”

Wheeling’s Elliott said there’s more to making a community business-friendly than most people think.

“You have to compete not only with good jobs, but offer a place that’s good to live and work and play,” he said. “We’re starting to see it now, the market rate of housing going into the downtown. We’ve had a couple (upscale housing) projects in the last few years that are now fully occupied. People said they wouldn’t work, but they’re full because the younger generation wants to live and work where they can walk to work and walk to downtown restaurants. There’s a residential component being added to our downtown now.”

He said outsiders are starting to realize what West Virginia — and Wheeling, in particular — has to offer.

“If you draw a big circle around Wheeling with a radius of 500 miles, you’ll find about two-thirds of the U.S. population lives within that circle; we’re located on a major interstate, we’re located on a major waterway,” Elliott said. “It made Wheeling a hub in the 1800s and it’s still an incredibly good selling point.”

Elliott said there’s still room for improvement: Wheeling scored high on business costs and access to resources, thanks to its “diverse network of banks, a couple national and some local” and support from local colleges and universities, but below average in terms of its business environment.

“The story of Wheeling is really the story of the Upper Ohio Valley,” he said. “Over the past 40 years we’ve seen decline and economic stagnation, but the good news for Wheeling is we’ve weathered the storm a lot better than our peers. … We’re starting to see investment (and) entrepreneurship take root again. People are talking about Wheeling in the future again, as opposed to talking about how great it used to be back in the 1950s.”

Elliott said his generation wanted to get out of West Virginia, but these days if you start asking students about their future plans, more and more say they will stay if they can find an opportunity.

“It’s a big psychological change that’s happened here in the last few years,” he said. “I don’t want to give the impression we’re out of the woods and where we want to be — we’re not. But everything seems to be headed in the right direction. People who were sitting on the sidelines are looking to invest; people are looking at buying buildings that have been sitting there empty for years. Across the city, the indicators are pointing toward investment in Wheeling’s future. he opportunities are there, for the taking.

“It’s just like anything else — people have to believe in Wheeling to invest in it. I think we’re changing the conversation of what’s possible here.”

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