Michigan needs to embrace its independent workforce

These one-person businesses get precious little support. That’s sad, because these people provide a lower barrier to entry for our local startups to get access to skill.

Equally important, these people are honing the skills they’ll need if they want to grow their companies in the future.

I started working as an independent software developer in 1993. My business partner, Dianne Marsh, did the same thing about the same time. Between us, we helped build software products for several of Ann Arbor’s startup companies.

We also learned about all the little details needed to run a business, regardless of size. Thinking about our experiences in this world made me realize that we need to embrace independents for the benefit of the independents, and the startups they help.

Almost every successful business owner I know has run a one-person company at some point in the past, which provided valuable insight into running a business.

I would encourage any of our aspiring entrepreneurs to spend some time running a one-person business before starting work on your idea for the ‘next big thing’.

To run a successful one-person company, you’ll learn about business finance: you are responsible for forecasting, managing cost, and managing your balance sheet.

You’ll learn about marketing and sales: If you want to have any business, you’ll need to perform those marketing and sales functions. You’ll learn something about contract law (hopefully with the help of an attorney) because you will be executing any business agreement you enter.

You’ll learn to evaluate markets. If you aren’t generating sales, you need to figure out why. You also need to change your offerings to match your market.

Our startup community also gains several advantages from a larger pool of independent experts.

Most obviously, independents provide a bridge to bringing in permanent employees. Independents provide more flexibility for startups. Startups, by their very nature, cannot predict their needs very far in the future, and yet, their needs are growing.

Startups need to ramp up, and sometimes down, very quickly. Startups need to produce the initial version of the product quickly, and then they need to push the marketing and sales of that initial version. That’s how they validate their markets, and plan the future release.

The startup model works well for independents. The tech independents will want to help create that first release. The marketing and sales independents will want to help launch that first generation product. The finance experts will spend smaller amounts of time, but be a more constant presence.

Despite the role they play in our economy, independents aren’t counted as important players. An independent consultant starting a new business does not show up as a ‘new job’ created. Our economic development organizations are tasked (rightly) with growing jobs in our region. That means growing new companies that hire employees. Only permanent new jobs are counted.

The most important change is to add those independents to how we track job creation. When I read how some of the unemployed have ‘stopped looking for work’, I’m certain that some of those people are now working as independents. I wish them luck. It’s hard, but it’s worthwhile.

I want to see our government statistics measure these independents as economic activity.

If we agree that we need to support these independents, what should we do? The easy answer is to continue some of the programs that already exist.

SPARK does provide some benefits to independents, like their OpenCoffee events. One challenge for SPARK is that their mission is to help high-potential startups. I’d bet that most independents have not even considered SPARK as a resource. SPARK doesn’t market their services to these individuals, and they should do more to make everyone aware of what is offered. SPARK Central and SPARK East offer space that can help independents that need places to hold meetings, but aren’t ready to have their own office space yet.

In addition to SPARK, Ann Arbor has some fantastic co working facilities that need to be part of our touted resources: Ann Arbor Tech Brewery, Workantile Exchange, and others.

Additionally, we do have some groups that provide networking opportunities for these independents: Ann Arbor Young Professionals, LA2M, and several technology user groups.

Independents also need to stop thinking that everything they do is completely unique. If you’re an independent, some things you’re doing may be completely unique. But other challenges have been faced by others before you, and are being faced by others in our community today. Look at that previous paragraph again, and realize that there are many locations and organizations where you can get advice, or even just talk through current challenges with someone else trying to go it alone.

We need to realize that all these different kinds of business activities are part of the greater economic ecosystem, and independents play an important role in that ecosystem.

Bill Wagner is co-founder of SRT Solutions in Ann Arbor and a software blogger. He shares this regular column with co-founder Diane Marsh.