An increasing number of small companies are turning to local coalitions for help in containing health-care costs. Most of the nation's 185 coalitions were formed in the early 1980s, typically by larger employers, to study such issues as managed care or group price negotiations. Now, many groups are growing and recruiting smaller companies, says Gaylen Young, who tracks the trend at the American Hospital Association. One example: big employers in Tulsa were subsidizing the uninsured, so in late 1986 some of them helped create a communitywide health plan. Today the 28,000-person plan claims 3,500 members from small firms, 70% of whom were previously uninsured.
It should get easier to use government surveys for market research, thanks to a new Census Bureau program. Census already has state data centers to distribute its economic and demographic statistics, but most have not been effective in reaching businesses. Now, 15 states are experimenting with a range of outreach vehicles, from trade associations to Small Business Development Centers. Small to midsize companies are a special target, because larger companies can get market-research information on their own. "We're not officially adver-tising it as a small-business program," says project man-ager John Rowe. "But in reality it is."
How serious are state economic-development people about assisting growing companies? Ask Bruce Ferguson. His Maine-based company, ImmunoSystems Inc., recently became one of the first to use that state's latest small-business funding innovation: a 30% state tax credit for investments in some fledgling Maine companies. Ferguson had never heard of the idea until the state finance authority called one day last year to ask whether such a program would help ImmunoSystems raise capital. The answer, of course, was yes. Once the law was passed, Ferguson took advantage of it. "[This program] is such a logical thing," he says, "that I'm surprised the state government would think of it."
Some entrepreneurs' support groups are targeting start-ups for special help, particularly in the form of advice from more seasoned CEOs. The Pittsburgh High Technology Council regularly pairs start-up CEOs with experienced peers; several of the more successful CEOs decided to go a step further and launched CEO Venture Fund. Meanwhile, the Silicon Valley Entrepreneurs Club has arranged to have eight entrepreneurs-in-residence provide informal advice to the group's start-up members -- while learning about interesting deals. In Minneapolis, The Entrepreneur's Network is launching a special start-up group.
Small companies could benefit from the U.S. Commerce Department's push to have banks start community-development corporations (CDCs). A bank CDC allows a bank to make equity investments in companies in return for helping the local economy. One way to meet the requirement: make loans to small businesses. But banks have been reluctant to start CDCs, and the option has received little publicity. So only about 35 exist, of which just a handful focus on small-business lending, according to consultant John Sower. Commerce hopes to change that. It reports about 300 inquiries from banks in the first two months of its program -- and at least 24 serious proposals.
Banks are targeting more electronic cash-management services to small and midsize companies. A 1988 survey found that 16% of companies with sales of $5 million to $50 million used on-line cash-balance reporting, for example. Although the figure for smaller companies is undoubtedly much lower, the proliferation of PCs has made some cash-management services feasible for such companies as well. Banks are pushing the services because it's a good market, says small-business banking consultant Steven Cranfill. "In terms of new services, cash management is about the only thing small business is interested in."
-- Martha E. Mangelsdorf
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