Running a manufacturing business is challenging, even at the best of times. For growing manufacturers, economic incentives and tax credits are an often underutilized or a forgotten element of an operational growth plan. The triggers for these incentives involve hiring, equipment purchasing, and investment in real estate or tangible assets.
Here are three concrete actions and three insider tips.
Three actions to take today:
- Review the top federal programs and discuss with your CPA or finance team to ensure you are taking advantage.
- R&D Tax Credit
- Employee Retention Tax Credit
- Work Opportunity Tax Credit
- Search for “your State + Economic Development” and “your city + Economic Development” (i.e. “California Economic Development” or “Ithaca NY Economic Development) for state and local lists of incentives and economic development organizations to contact for more information or assistance.
- Most State Governors have newsletters for business to subscribe to announcing new programs and updates when funds have been replenished or become available.
And three insider tips:
- Let your local economic development organization and elected officials know that you have real options to move or expand jobs outside of the region or state. Contact other economic development organizations to understand what programs they would offer if you relocated to their area. Share this with your elected officials.
- Outline the quantitative and qualitative impact that your company has on the community and city where you are located. Discretionary programs favor companies which are involved in the community. In short, explain why you matter to the community—with personal stories and economics to back it up.
- Don't overask and underperform. Many of these programs have limited funds and companies tend to ask for much more than they need, while overpromising (such as in hiring or making certain capital investments). Ask for the bare minimum and overperform, and then come back and ask for more. The programs love when companies overdeliver and become shining examples that the program(s) work and so they will be more likely to provide additional funds.