Mark Sanchez: A couple of weeks ago I had a chance to sit down with Darrius Barnes. He's a former MLS soccer player, later went into the executive ranks after retiring and he was hired last fall as the president of AC Grand Rapids. This is the new minor league soccer franchise that's going to play in the MLS NEXT Pro men's league in less than a year. So, it's becoming real.
We've all been watching for a number of months, Amway Stadium going up with all that sheet metal going up and it's taking shape and the seats are going in. And now it's Darrius' job to build the franchise. You're going to start seeing a lot of attention as they start to bring awareness and build brand awareness and recognition of what's coming. And that's going to start with something coming on this summer, which is, this little tournament called the World Cup.
They're going to start organizing some watch parties for the World Cup matches in June and July. And that's all part of building the hype, building the buzz toward next year, a little less than a year from when AC Grand Rapids starts playing.
It's a good look at how he's going about building this franchise from the business perspective. They've got a lot of executive leadership positions to fill and they have to start working on corporate sponsorships and partnerships. And he says they've got a lot of interest in that so far with folks wanting to come together and align their brand with the team and the club. And then there are other folks talking about group ticket sales and marketing. But less than a year, we'll have another minor league sports franchise here in Grand Rapids.
Patrick Center: Did the two of you talk about building a roster and who will be playing on the pitch?
Mark Sanchez: That's one of those “to come” issues. Again, this is in its infancy right now. He has to build first that executive roster, somebody to handle group and ticket sales, somebody to handle marketing, somebody to handle sports operations, somebody to handle a lot of these business operations and that VP of Sports Operations. Once that person is aboard here this summer, then they start looking at hiring the coach, manager and then, toward the end of the year, start building that roster.
He said kind of toward the top of the story, we wrote, it's just beginning to move and building this franchise in its early stages. And over this course of the rest of the spring, summer, into the fall, you'll see step by step by step as Darrius really starts putting this thing together.
Patrick Center: Also putting things together, a company down in Zealand, Framery Group.
Mark Sanchez: Yeah, this was an interesting little announcement we received last week. This is a Finnish company, Framery Group PLC. It's based in Finland and it's going to set up U.S. operations, manufacturing operations in Zeeland. It's had a small logistics center there where it does its distribution in the U.S.
And this is a company that makes office pods. These are areas, you know, many, many years ago, all the office furniture companies' kind of went to this open space, open office idea where you're right next to each other. But what about when you need some privacy for a one-on-one meeting or a small group meeting or a phone call that needs to be done in private? Well, these are kind of these office pods. You go in, you have a seat, and you do your business.
So, this company, again, a Finnish company, it's coming into Zeeland. It's going to set up U.S. operations, at least manufacturing there. And if you're going to build office furniture, where are you going to go in the U.S. to build it? Right here in West Michigan, this is the home of the U.S. office furniture industry. You've got this amazing design and engineering acumen. You've got people that know how to upfill these products and mass produce them. And you've got some savvy marketing and business folks who know how to manage these operations. So, the company out of Finland specifically picked Zeeland to set up their operations because they're right in the middle of the home of the office furniture industry, the heart of the industry. And they need those skills that West Michigan has to start producing these pods.
Patrick Center: The pods themselves, do they have that Nordic look having this company from Finland?
Mark Sanchez: A little bit. They've kind of got a sleek, clean look to them. If you go on the CrainsGrandRapids.com, you can find the story, but yeah, it's kind of that European look, that sleek design that the Nordics are known for.
Patrick Center: We're talking with Crain's Grand Rapids Business staff writer, Mark Sanchez. Small businesses, we've got some new numbers out in Michigan.
Mark Sanchez: Yeah, there's some numbers and it's really saying that the small businesses are getting kind of hit pretty hard by these rising costs, especially for healthcare, energy, and labor. And this really is limiting the ability of small business owners to hire, to expand, and to invest in their companies. And it's driving what's called a “constrained entrepreneurial environment” in Michigan.
This comes to us from an annual report the Small Business Association of Michigan does. It's an entrepreneurial scorecard. They have dozens of metrics that they look at. They look at the data, they crunch the data, and then they issue a scorecard on how is Michigan doing for its entrepreneurial climate. And there's some contrast in the report this year.
Basically, what they're saying is the small business economy remains strong, although there is a clear shift in the direction of what things are going on. And part of that is the costs are hitting small businesses hard, limiting job growth there. And also, we're not seeing as many new companies formed, startups formed. Coming out of the pandemic a few years ago, you saw a real spike there in 2021, 2022, around that period and people starting their own company. They decided to go to work for themselves. Now that's leveled off. And the problem with that is you don't have as much coming into the funnel. You don't have as much coming out of the funnel. Simple equation. So, in the years down the road, we're not going to have as many of those second stage, lower middle market businesses that started off years earlier as a small business grew and they kind of hit that second stage. And that second stage business is really the core of Michigan's economy. That is where so many of the jobs exist. You always think about big corporations, but it's really small business, that lower middle market that account for more than half the jobs in Michigan.
So, this is a concerning issue as well as those rising costs. Now the question of course is how do you use this data? When I spoke last week with Brian Kelly, he's the CEO of the Small Business Association of Michigan. He talked about maybe there are some things we can start looking at, put more emphasis on supporting small business. And part of this is to appeal to the folks at the state capital about how do you always work to make a business climate, entrepreneurial climate for business.
In our conversation with Brian, that's always the never-ending debate about where do you put that line for regulation, for taxation? And he cited some of the issues of regulatory pressures that small businesses feel, especially with the PTO (Paid Time Off) and other issues. So bottom line right now, that small business environment is okay, but there's some worrisome trends beginning to eke out here.
Patrick Center: Before I let you go, you mentioned a bit of a feel-good story coming out of Kalamazoo at Western Michigan University.
Mark Sanchez: Yeah, this is an interesting story we did a couple of weeks ago. The president there at Western Michigan University, Russ Kavalhuna, who started last July, he is relatively new. He and of course many universities are big believers in this idea of experiential learning or hands-on learning. How did today's college students learn? They learned by doing, not sitting in a lecture hall being lectured to and then test it to see if you absorb that information. You learn better by doing.
So, he's going to allow an intern to do. He has committed a six-figure amount of his personal investment portfolio. They won't tell us exactly how much, just six figures. And he's going to let a student intern manage his portfolio. Basically, do research, do the analysis, make investment recommendations. And they're working with an investment advisory firm there in Kalamazoo, Zhang Financial. Lynn Chen-Zhang, who's a co-owner of the firm, is a trustee at Western Michigan. And the student's name is Mo Tall, very, very bright young man out of Bloomfield Hills. He's graduating this spring with a degree in personal finance for the next few months before he heads off to his career. He's going to manage a six-figure portion of the university president's portfolio.
This is kind of taking that idea of investing in the organization to a new height. So as Russ said, putting his money where his mouth is. Interesting program he's putting together, and he hopes that this will continue beyond the first year and additional interns majoring in finance and personal finance they'll pick up that. And then they're going to look at where can this model apply to other degree programs. Now I mentioned to him when we had a conversation, what about design? And how can the university then get involved with that? And the point is that lot of universities require an internship and a lot of internships require you work on a project. But this particular interest, the president there at Western Michigan University, he's really taken that to a whole new height with dedicating a portion of his own personal portfolio into the hands of a student intern.
Patrick Center: Crain's Grand Rapids Business staff writer Mark Sanchez, thank you so much.
Mark Sanchez: Thank you, Patrick.