- Study conducted ranks Holmes County as top spot in Ohio and Wayne County fourth for small business .
- Innovation, cooperation and initiative keys to small business success in Holmes County.
- Tourism plays a large part in thriving retail operations.
MILLERSBURG − An entrepreneurial spirit, coupled with innovation and cooperation, have helped small businesses thrive in Holmes County, which is rated No. 1 in the state for small business owners, with Wayne County rated No. 4 according to a study by SmartAsset, a national investment firm.
Holmes County Economic Development Director Mark Leininger credits the entrepreneurial spirit of the community for the thriving small business community in Holmes County.
“We have the good fortune to have a large number of entrepreneurial people in the community,” Leininger said. “If there is a need for a particular product, chances are there is a shop in Holmes County making it, or making some part of it.
“A small business ecosystem has developed around our entrepreneurs, the foundations of which are innovation, cooperation and initiative,” he continued. “These principles have translated into business success.”
In recognition of this fact, the county government has been careful to ensure there are few barriers to the creation and operation of small businesses, according to Leininger.
“The approach of the county government has been to provide the infrastructure businesses need to operate, and to support business growth with resources, such as the enterprise zone program,” he said. “Otherwise, the approach is to remain hands off.”
Holmes County Chamber of Commerce Executive Director Tiffany Gerber concurred.
“Small businesses are the bedrock of Holmes County. Our entrepreneurial spirit, especially in the Amish community, has led to incredible niche projects and meets supply needs of our larger businesses,” she said. “The work ethic of both the plain community and the people of Appalachia converge here and it shows in the innovation that our small business owners lean on to create unique experiences and products.”
A community of small businesses
Leininger pointed out the majority of business in the area is small business.
“Nearly all of the businesses in Holmes County are considered to be small enterprises – businesses with fewer than 500 employees,” Leininger said. “In terms of total number of employment positions, manufacturing is the largest local industry sector, by a fairly significant margin. Manufacturing positions typically provide a higher level of compensation and benefits than other industry sectors.
“As a result, the small business cycle in the manufacturing sector tends to self-perpetuate – the experience and wages gained by a production worker often provide the knowledge and capital needed for that worker to start his or her own small business,” he added.
Tourism is big for small business
Samira Zimmerly, president of the Wooster Area Chamber of Commerce acknowledged what a big role small business plays in the Wayne County economy.
“Small businesses play a vital role in driving innovation and economic growth and we are truly fortunate to have such a diverse small business community in Wayne County,” she said. “Small business owners are the backbone of our economy. The success of our small businesses is essential to the vitality and health of our economy and community.”
“Tourism definitely is a driving force in our small businesses as retail and tour and culture-based experiences make up a high percentage of our economy,” Gerber said. “That same innovation coupled with non-traditional education paths translate to the success of our largest manufacturers as well.”
Five factors used to calculate standings
Steve Sabato, a representative of SmartAsset, explained how the study was conducted.
Small businesses typically are incorporated as pass-through entities, meaning the business owners pay income taxes on the company profits rather than the company itself paying income tax, he said.
Because of this, income taxes can play a major role in determining the financial success of a small business. To determine income tax burdens across counties, we used the national median household income and then applied relevant deductions and exemptions before calculating federal, state and local income taxes for each location, he said.
To determine the best places for small business owners, the study measured five factors:
- The proportion of people in a county with small business income.
- The reported business income.
- The amount of tax a potential resident must pay on income.
- The five year change of small business tax returns.
- The five year change of small business income.
To determine how attractive a region is for small business owners, a comparison of the number of tax returns that report small business income to the total tax-filing population of the region.
“Next, we compared the total amount of small business income to the overall amount of income reported in each region,” Sabato said. “We then measured the change in these variables over a five-year period.”
These five factors were indexed and equally weighted to yield the firm’s Small Business Index. Places with the highest Small Business Index are the places that ranked the highest in the study.