Planning and Economic Development

Frequently Asked Questions

Economic Development services

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Q: What is the first thing that I should do in order to start a small business?
A: The first thing to do is to determine which type of legal entity will best suit the      needs of the business. There are four legal forms of business organization —      sole proprietorship, partnership, corporation and Limited Liability Company.       The type of organization formed determines where the business will be      registered (the County or the State), corporate liability issues and the Federal      and State tax structure. It is strongly advised that legal counsel be obtained      before making this decision. The Macomb County Small Business and      Technology Development Center offers a free seminar conducted by an      attorney addressing the legal structure a company should have and the      advantages and disadvantages of each. 

     For a package of information on the seminars, as well as a ‘Checklist for      Starting a Business’, please call 586.469.5118

Q: How do I obtain a government grant?
A: There is a misconception that the Federal Government issues grants to those      who wish to start a business.  Unfortunately, there are only a few grants issued      and these grants are usually very specific and highly competitive. Generally, the      grants do not apply to the average person trying to start a business. Most      grants are provided by private foundations. These foundations will usually offer      grants only to non-profit organizations that have a similar, related or      complementary mission to their own.

     For more information please call the Macomb County SBTDC at 586.469.5118

Q: How do I secure an SBA loan?
A: It is a common misconception that a loan from the SBA is better than a loan      obtained from a bank.  The SBA does not lend money. It is a guarantor of loans      made by private banks and other financial institutions. The SBA has a loan      guarantee program that enables a small business to borrow money from a      bank when, absent the guarantee, the bank would refuse to make the loan.      The Loan Guarantee program is not one that the borrower applies for – the      bank approaches the SBA on behalf of the borrower and the bank is      responsible for lending the money with a portion of the loan being secured by      the SBA.

     For more specific information, please contact the Macomb County SBTDC at      586.469.5118

Q: Where do I get a re-sellers / sales tax license?
A: A Sales Tax License is obtained from the Michigan Department of Treasury.  It      takes approximately four to six weeks to obtain this license.  The license must      be obtained before any product can be sold.  The Michigan Department of      Treasury can be contacted directly at 517.636.4660.

     If you plan to sell on the Internet, please contact our office for more      information, at 586.469.5118

Q: Where do I get a business license?
A: Most business licenses are issued at the State level.  Information regarding the      types of licenses that are required for a given business, as well as the      application and process to be followed to obtain the license can be found on      the State of Michigan website www.mich.gov.

     Some local communities may also require a business license.  It is best to      check with the city, township, or village offices regarding local requirements.       Additional information and help can be obtained from Macomb County’s      Department of Planning and Economic Development.

Q: I have an invention that will make me a millionaire!  What should I do?
A: There are a number of steps that need to be taken to move the invention from      concept, to prototype, to production, and then to the customer.  First, the      invention or intellectual property must be protected from infringement. This is      achieved by obtaining a patent through the United States Government’s Patent      Office. 

     The next step is to determine the type of corporate structure that will be needed      for the business, and to get the business established. A formal business plan      will be necessary to present information regarding the invention and company      to potential investors and financial institutions.  The Macomb County Small      Business and Technology Development Center has business counselors on      staff.  They have the experience and knowledge needed to help any      entrepreneur/inventor get started in business.  Services are provided without      charge and consultations are available by appointment only.

     Please call the Macomb County SBTDC at 586.469.5118 to make an      appointment.

Q: What is a business plan and how is it created?
A: A business plan is a formal statement of a business goal, the reason it is      believed the goals are attainable, and the plan for achieving the stated      objectives. A written business plan helps identify many elements of the      business including market size and definition, product offerings and      description, product development and launch dates, distribution plans, sales      channels, management team and credentials, revenue forecasts, estimated      production costs, general business and startup costs, projected sales,      monthly cash flow and estimated break even point and profits, etc.  It is the key      element to successfully planning the business. 

     Most people believe a business plan is only necessary when you are seeking      bank financing.  This couldn’t be further from the truth!  A good business plan      is something that a business owner should revisit at regular intervals and      there should be measurements to see how well the business is meeting its      goals. 

     Writing a business plan can be a daunting task.  Free assistance with      preparation or reviewing the completed document is available from our      business counselors.

Q: My sales aren’t what they should be.  What can I do to improve them?
A: For any size or type of business to be successful it should have a marketing      plan. A good marketing plan begins by identifying the targeted customers and      their key demographics.  The plan should include a description of the product      or service to be offered, note any special features or characteristics of the      products and the advantages provided to the customers by using the product      or service, and should include a pricing strategy.  The marketing plan should      contain information on competitors including the level of demand for their      offerings and their strengths and weaknesses.   Finally, the marketing plan      needs a budget that outlines an advertising and promotional layout.

     Once a company understands its customers, what is important to them, and      how its products satisfy their needs, it can more effectively communicate with      the customers and stress the products’ benefits.

     Our business counselors can help you determine your marketing needs and a      marketing strategy to meet the goals of your business.  Consultations are      available by appointment only.  Please call the Macomb County SBTDC at      586.469.5118 to make an appointment.

Q: How do I obtain a Tax ID number for my business? 
A: Incorporated businesses and companies that hire employees must obtain an      Employer Identification Number.  A Federal Tax ID (or FEIN) is issued by the      Internal Revenue Service (800.829.4933).  The application and instructions for      completing it can be obtained by visiting www.irs.gov.  The application can be      completed online as well.

Q: How do I get a Sales Tax License to purchase wholesale?
A: A Sales Tax License is issued by the State (517.636.4660).  This license      allows a company to purchase items that are for resale without paying sales      tax.  If the items purchased are for business use, the sales tax must be paid.  If      you have additional questions, please call the Macomb County SBTDC at      586.469.5118.

Q: How do I secure a loan for my small business, and what do I need to      prepare?
A: Before approaching any lending institution the organization will need a formal      business plan (See above section titled “What is a Business Plan?”).  If the      company is a startup organization it will need to have private financing in place      for the owners portion of the investment in the company.  A conservative rule of      thumb is that approximately 20 percent to 30 percent of the total investment is      needed. No lending institution is going to invest in a startup business if the      principles of the business do not believe enough in the venture to invest their      own money in it.

     If the company is an ongoing enterprise most lenders like to see a two-to-three      year history of the business in terms of tax returns and year-to-date financials      on the business and for the principles involved in the company.

Q: What types of financial assistance do the state, county, or local      communities provide to businesses?
A: Regardless of the nature of your business, the Department of Planning and      Economic Development can provide you with direction in obtaining financial      assistance in starting or maintaining operations.

     The department’s Economic Development Services Group can assist qualified      manufacturers and technology based businesses to access financing through      various mechanisms.  The EDSG is experienced in working with fixed asset      financing programs such as the SBA 504 loan and tax exempt Industrial      Development Revenue Bonds. Where necessary, non-traditional sources of      financing can also be explored.

     The EDSG is also experienced in assisting manufacturers in securing tax      abatements and other incentives.  These programs are used to help ease the      financial burden on manufacturers that are buying new machinery and      equipment or are expanding their current building or relocating to a new site.       Other select incentives for qualified businesses include grants for workforce      training and infrastructure improvements.

Q: What types of incentives are available?
A: Most incentives are targeted to benefit businesses that are in the      manufacturing sector. Included within this group are businesses that are      manufacturing-related (such as R&D, engineering and prototyping) and those      businesses that are primarily technology-based. Among the available      incentives are tax exemptions, credits, grants and industry specific programs.      The most commonly awarded incentives include tax abatements, Brownfield      Tax Increment Financing, the Single Business Tax Credit, and the Michigan      Economic Growth Authority program. (Hot link to Macomb business site for      more info)

Q: What are tax abatements and how do they work?
A: In general, a “tax abatement” or Industrial Facilities Exemption Tax (IFET) is a      50 percent reduction in the real and/or personal property tax liability of a      qualified business, for a period of up to 12 years (per Michigan Public Act 198      of 1974).  The granting of the abatement and the term of years is determined at      the discretion of the local unit of government. Other tax exemptions provided for      by enabling legislation in the State of Michigan include plant rehabilitation,      economically distressed / Core Communities, and air/water pollution control.       (Hot link to Macomb business site for more information)

Q: How do I determine whether my company qualifies to receive a tax      abatement?
A: The Department of Planning and Economic Development’s Economic      Development Services Group is the authoritative resource for identifying which      exemptions are available to your company and for helping you to secure those      exemptions.  As a free and confidential service, the EDSG will provide you with      turnkey management of the application process.  This relieves you from the      most time consuming and labor intensive elements of the process.

Q: What is a Brownfield Redevelopment Project?
A: Brownfields are abandoned, idled, or under-utilized industrial or commercial      properties where expansion or redevelopment is hindered by real or perceived      environmental conditions.  The state has made available incentives that      encourage and provide financial assistance for the redevelopment of such      sites.  This allows potential developers to rejuvenate sites that have the      necessary infrastructure already in place. To determine whether your      expansion or relocation project qualifies for brownfield redevelopment      incentives, contact the EDSG at 586.469.5285.

Q: What is a Tool and Die Recovery Zone and what are the benefits to a      business?
A: Under the Michigan Renaissance Zone Act the Michigan Economic      Development Corporation can designate up to 25 tax free zones within the      state. The zones allow companies to operate tax free for up to 15 years      enhancing their ability to compete globally. In order for a property to be      designated as a T&DRZ it must be owned/leased by a qualified tool and die      business and operated primarily as a tool and die business, and have fewer      than 50 full-time employees. Also, the local government must agree to abate      the business’ local taxes, and the business must join a qualified collaborative.      To determine whether your business qualifies for potential T&DRZ benefits,      contact the EDSG at 586.469.5285.

Q: What is a Tax-Exempt Industrial Development Revenue Bond and what      types of businesses can use them?
A: Tax-Exempt Industrial Development Revenue Bonds, available to qualified      manufacturers, are issued through the Macomb County Economic      Development Corporation to provide low-interest financing for investments of      $1.25 million or more (up to $20M). Bond proceeds may be used to finance      fixed assets (real and personal property). The bonds are limited obligations      payable solely from revenues or other funds provided by the manufacturing      company.  The first step in securing IDRB financing is to obtain a letter of credit      from a bank or other rated financial institution. To learn more about IDRB      financing and determine whether your planned investments qualify, contact the      EDSG at 586.469.5285.

Q: What can be financed with Tax-Exempt Industrial Development Revenue      Bonds and what benefit does it provide?
A: Items that can be financed with Tax-Exempt Industrial Development Revenue      Bonds include manufacturing facilities, both new and existing, including land,      buildings, site work, and new machinery and equipment.  Manufacturing is      defined as any facility that is used for the production of tangible personal      property or is engaged in a process that results in a change in the condition of      such property. Typically, any process that results in a change in, or adds value      to, raw materials or other products can be considered a “manufacturing      process”.

Q: How do I find the best site or location for my company?
A: Finding the right site or building for a business can be a most labor intensive      and time consuming task. The department’s Economic Development Services      Group understands that your deliberations regarding where to locate are      directly affected by   our ability to provide you with the information that you      require: suitable sites and facilities, transportation network, workforce, and the      availability of state and local incentives.  The EDSG will serve as your local site      consultant, working with real estate professionals, developers, utilities, local      utilities and any other resources necessary to   bringing in professional      realtors and developers when needed.

Q: What types of business data are available to my company and what is
      the cost?
A: The department has access to a wide variety of data that are valuable to      business. These include U.S. Census, consumer demographics, market      segmentation, consumer spending, and business information for      manufacturing and service industries. Additionally the department maintains      commercial property databases used to assist you in selecting the right site or      building for your business. All of these data are available without charge to      qualified clients.