Expert Advice

Michigan state program gives group consulting discounts to small firms.

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As a small-business owner, Grant Hole doesn't have many good things to say about bureaucrats. So it's surprising to hear him credit advice from a new Michigan state program with turning around his 15-person company, Superior Tire Service Inc., of Greenville, Mich. And that's not the only surprising thing about the program called The Growth Margin: how many other government projects have a money-back customer-satisfaction guarantee?

From the start, The Growth Margin has taken an unusually market-driven approach to government. Through business-owner focus groups, Michigan concluded that using outside experts helps small companies grow. Since entrepreneurs often lack time or money to find such experts, the state negotiated half-price volume discounts with a pool of consulting firms. In most cases, the state kicks in 20% of the discounted fee. Community groups make the matches, using the guarantee and a customer survey for quality control.

Group consulting discounts for small firms aren't new; some offices of Coopers & Lybrand provide them via business incubators. Michigan's innovation is having the state organize the market -- rather than add a new bureaucracy. "Businesspeople say, 'Gee, this doesn't sound like government,' " says Michigan's Jeffrey Padden. "Well, it is, but we'll take that as a compliment."

-- Martha E. Mangelsdorf

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