Hutchinson has seen its fair share of layoffs over the years. Hutchinson Technology employed thousands, but experienced semi-regular cycles of layoffs. Now HTI-TDK Corp. employs roughly 95 workers at its Hutchinson branch. The same cycle of layoffs has been seen at 3M and other businesses in the city through the years.
According to a report by Challenger, Gray & Christmas, a global outplacement firm, labor cuts are up 319% from March of last year. During the first quarter of this year U.S.-based employers laid off 89,703 workers.
Hutchinson Economic Development Director Miles Seppelt became concerned with the layoffs over the years and decided the city needed to take action.
“With HTI and 3M both laying off thousands, that’s a lot of eggs in one basket,” Seppelt said. “We got to get more companies here employing 30, 40, 50 (people) so if you lose one, it’s not a giant catastrophe.”
This was the catalyst for creation of the Hutchinson Enterprise Center. Opened in 2017, the Enterprise Center is designed to accelerate small manufacturing business growth during the early stages.
“It’s hard to get a company to move, come or expand to Hutchinson,” Seppelt said. “So we thought, why not grow our own?”
The Enterprise Center’s goal is to give small manufacturers a chance to survive, grow and be successful.
The aim, Seppelt said, is to provide companies a home for three to five years in order to build equity, build the company, and learn to manage a business inside and out. If everything goes well upon graduation and the business meets extra criteria, the city will sell them a lot for $1 in the industrial park to construct a building.
The first cohort to occupy the Enterprise Center will leave in December, opening the 20,000-square-foot incubator space to other manufacturers.
Dean Bertram’s Innovative Foam is one of the first three businesses graduating later this year.
“I think the program has done what they wanted it to do,” he said. “It’s allowed me to grow, to spend money on growth. It’s helped me get through those rough few years of COVID. I think it’s helped launch me to the next place.”
Innovative Foam recently purchased a 10,000 square foot building and plans to move in later this year.
The Enterprise Center not only offers manufacturing, it also provides business education, coaching and mentoring. Some of the topics covered are marketing, accounting and human resources.
“We want these guys to be experts in business so when they graduate, they can go out and be successful,” Seppelt said.
According to the Minnesota Department of Employment and Economic Development, Hutchinson’s economy is dominated by manufacturing, with 27.2% of its jobs in that sector, compared to 10% nationally. Manufacturing has a jobs multiplier of 7.4, which means for every one job in manufacturing an additional 7.4 jobs are created in the economy.
An example of this type of progress is RD Machine, which moved to Hutchinson in 1997. Once the Enterprise Center opened, owners saw an opportunity to experiment with jet water cutting in an incubator space.
“That was a big success,” said Seppelt. “They got more business than they can shake a stick at. Because they have this new capability, and that triggered a 21,000-square-foot expansion on their main building.”
The U.S. Small Business Administration defines a small business as an independent business having fewer than 500 employees. This makes up 99.9% of all businesses in the United States. Statistics from the SBA indicate only 48.5% of new business start-ups survive to their fifth birthday, with nearly 40% failing within their first two years.
However, data from the International Business innovation Association reports businesses that successfully graduate from an incubator space have a five–year survival rate of 87%.
The application process is now open for 2024 occupancy at Hutchinson Enterprise Center. Details can be found online.
“Nobody’s going to come in and save us,” Seppelt said. “Nobody’s going to ride to the rescue. We got to do it ourselves.”
