Thomas Jefferson High School for Science and Technology
Start Your Business Here
In October 2001, Ms. Grace Dittmar founded Trusted Missions Solutions (TMS), an IT and management consulting firm based in Mclean, VA. Today, TMS is one of the 50 fastest growing companies in Virginia,1 with 50 employees and expected revenues of $8M.2 The story of TMS dramatically demonstrates why Greater Washington is the best place for new businesses; following the company's progression, we will investigate the start-up support, business environment, infrastructure, and culture that allow growing businesses in the region to thrive.
To begin, Ms. Dittmar sought help, and she didn't have far to go. Greater Washington is home to numerous companies, governmental organizations, and public-private partnerships that support the start-up and development of small businesses through free or low-cost planning, market research, and financial assistance.3 The DC Small Business Development Network website summarizes their objective: "We're in the business of helping small businesses."4 Ms. Dittmar took advantage of one such organization, the Washington, DC chapter of the Service Corps of Retired Executives (SCORE), to develop a solid strategic plan.5
Next, Ms. Dittmar needed to secure contracts to get her company off the ground. Here again, she received assistance: near the end of 2002 her company was certified by the Small Business Administration's 8(a) Business Development Program, which is designed to give "socially and economically disadvantaged entrepreneurs . . . a foothold in government contracting."6 While this program exists throughout the country, nowhere is it as effective as in the Greater Washington area; roughly half of all federal contracts go to companies with a presence in the region.7 Ms. Dittmar's company particularly demonstrates this advantage because it primarily serves federal government clients. In fact, TMS recently formed an 8(a) joint venture to win a five year contract with the Department of State with a ceiling value of over $100M.8
Other programs offer similar but perhaps even farther-reaching benefits. One example is the Local, Small, Disadvantaged Business Enterprise (LSDBE) program; this DC program's goal is to allocate 50% of the expendable budget for District agencies to contracts with small businesses. In some instances it also requires or offers incentives for companies to subcontract some of their work to LSDBE certified companies.9 Another opportunity for small businesses is the HUBZone program, which provides contracting preferences for small businesses operating in "historically underutilized business zones."10 A variety of DC-area loan programs offer attractive repayment terms for small businesses,11 and the area is one of the fastest growing regions for venture capital investment.12 Greater Washington therefore offers excellent support for small businesses to win contracts and raise capital.
Ms. Dittmar's IT and consulting service company takes advantage of one of Greater Washington's specialties: technology-intensive services. According to the Greater Washington Initiative, "one in ten employees [in the area], twice the national average, work in the technology field," and "the region leads the nation in the number of math and computer science employees."13 Smaller companies can capitalize on the growth of the technology industry; as technology becomes cheaper and improves at unprecedented rates, niche-market opportunities abound. More businesses on the Fortune Small Business 2008 list of "America's 100 fastest-growing small public companies" are in the technology industry than in any other industry.14 In 2007 alone, the Federal Government purchased an incredible $42 billion worth of technology-intensive services from businesses in Greater Washington, roughly 72% of the total $58.6 billion spent for all goods and services from area businesses.15
The three different political jurisdictions that comprise the Greater Washington region widen the number of opportunities available for growing businesses like TMS. All offer some of the greatest operational benefits in the nation for small businesses. Virginia was ranked the "Best State for Business" in 2008 by Forbes.com for the third year in a row due particularly to its low business costs, regulatory climate, and economic growth.16 The Commonwealth's corporate income tax, at 6%, is one of the lowest in the country and has not been raised since 1972.17 Additionally, Virginia has the highest concentration of technology workers in the country.18 The District of Columbia also offers financial incentives in the form of a multitude of tax credits, including "one of the most attractive incentive packages for high-tech businesses in the country," according to the Washington, DC Marketing Center.19 Finally, Maryland provides tax incentives to encourage research and development and investment in technology.20 These contribute to Maryland's status as the state with the highest percentage of professional and technical workers21 and the second best technology infrastructure in the nation.22
Furthermore, the DC Metropolitan Area boasts a secure telecommunications network23 and a reliable power grid,24 essentials for keeping up in the modern business world. The transportation infrastructure is one of the best in the nation with its many highways, three major airports, and Metro and rail systems – the second largest rail transit system in the nation.25 According to the Greater Washington Commercial Association of Realtors, the region's commercial real estate market is "performing better than most," and is expected to "continue its strong performance and growth" during the remainder of the year.26 As rising energy costs are negatively affecting all businesses –and especially small businesses – it is advantageous to be situated in the green capital of the nation. Greater Washington has the largest green collar workforce in the U.S., the region surpasses all other major metros in green building, and residents have "unprecedented access to alternative power generated from biomass, landfill gas, solar, water, and wind."27
The Greater Washington economy also benefits from the presence of the Federal Government, which helps insulate the region from national economic recessions. This is particularly important for smaller businesses, as they are the most vulnerable to economic declines. The magnitude of federal purchases helps boost the area's economy. This is clearly demonstrated through an analysis of the 2001 recession; from 2001 to 2003, eight of the ten major metropolitan areas reported job losses, but the Greater Washington area actually gained 66,000 jobs. From 1997-2007, the area added 721,000 net new jobs, a growth surpassed only by New York (with 724,000), whose economy is over two times as large as Greater Washington's.28 As 93.5% of net new jobs in the U.S. since 1989 have come from small businesses, this high number of new jobs is a great indicator of the strength of small businesses in the region.29 For the past 17 years, Greater Washington has "experienced steady levels of growth," and analysts estimate growth of more than three percent a year for the next five years.30
As "small firms with fewer than 20 employees annually spend 45% more per employee than larger firms to comply with federal regulations," it is particularly important that their employees be the best and most productive available.31 There is no doubt, the DC Metropolitan Area has the "best-educated and most productive workforce in the nation."32 With 21% of the region's workforce having a graduate or professional degree and 46% a bachelor's degree, Greater Washington easily tops the ten other major metropolitan areas in the U.S.33
But what draws such a crowd? First, the great quality of life in Greater Washington; with over 80 theatre companies, 234,000 acres of parkland, and roughly 320,000 seats at major sports stadiums and other large venues, the culture of Greater Washington is lively and dynamic. Further, the region's school systems rank above those in all other major metropolitan areas.34 The residential real estate market in Greater Washington has historically been one of the strongest in the nation and is certainly performing better than most in the country even today.35 Greater Washington is additionally one of the wealthiest among the nation's large metro regions, ranking second in median household income in 2008. "This latest data provides a strong indicator of the region's attractiveness to a highly-educated workforce. Greater Washington continues to attract and retain the best and brightest," said Matt Erskine, executive director of the Greater Washington Initiative.36
The advantages of building and growing a business in Greater Washington are clear; it is easy to see how Ms. Dittmar's company was able to prosper in the region. According to Ms. Dittmar, her company's initial success was due to "securing contracts, seeking financing, and creating a sound strategic plan" – all of which were supported by public and private organizations in Greater Washington.37 The three different jurisdictions offer a wide variety of operational benefits for start-up businesses, and the great telecommunications, power, and transportation infrastructures are essentials for an ideal commercial environment. Greater Washington is at the forefront of the technology industry, which is particularly beneficial for smaller businesses. The area is insulated from economic recessions due largely to the presence of the federal government, and the workforce is the most educated in the country. The great quality of life and culture of the region attracts and retains these high-quality workers. It is no surprise then that, according to Inc. Magazine, Greater Washington has had the "largest number of fastest-growing private companies in America" for twelve years in a row!38
1 Trusted Missions Solutions. (2008). Success with a team you can trust. Retrieved October 11, 2008, from http://www.trustedmission.com/
2 U.S. Small Business Administration. (2008, July 14). Success news. Retrieved October 11, 2008, from http://www.sba.gov/?idc/?groups/?public/?documents/?dc_washington_dc/?dc_succ_news_08-17.pdf
3 Washington, DC Marketing Center, & Georgia Avenue Business Resource Center. (2004). Starting your business in Washington, DC. Retrieved October 11, 2008, from http://dcbiz.dc.gov/?dmped/?lib/?dmped/?info/?pdf/?sbg.pdf
4 District of Columbia Small Business Development Center Network. (2008). The Washington DC SBDC. Retrieved October 11, 2008, from http://www.dcsbdc.org/?default.aspx
5 See note 2.
6 See note 2.
7 Greater Washington Initiative. (n.d.). Greater Washington, DC is... Retrieved October 11, 2008, from http://www.greaterwashington.org/?pdf/?gwi_is_0107.pdf
8 See note 2.
9 See note 3.
10 Small Business Administration. (n.d.). HUBZone. Retrieved October 11, 2008, from https://eweb1.sba.gov/?hubzone/?internet/?general/?whoweare.cfm#2
11 See note 3.
12 National Venture Capital Association, & PricewaterhouseCoopers. (2008, March 11). Fastest growing regions for venture capital investment lie outside Silicon Valley. Retrieved October 11, 2008, from http://www.nvca.org/?pdf/?Fast_Growing_07Q4.pdf
13 Greater Washington Initiative. (n.d.). Quick facts. Retrieved October 11, 2008, from http://www.greaterwashington.org/?regional/?quick_facts/?index.htm#
14 FSB 100: America’s fastest-growing small public companies [Special section]. (2008, July/?August). Fortune Small Business. Retrieved from http://money.cnn.com/?magazines/?fsb/?fsb100/?2008/?full_list/?index.html
15 Greater Washington Initiative, Fuller, S. S., & McClain, J. (2008, June 24). Greater Washington 2008 regional report. Retrieved October 11, 2008, from http://www.greaterwashington.org/?pdf/?RR_2008.pdf
16 Virginia Economic Development Partnership. (2008). Why Virginia? Virginia is the best state for business. Retrieved October 11, 2008, from http://www.yesvirginia.org/?whyvirginia/?default.aspx
17 See note 16.
18 Advancing the Business of Technology. (2008, April 2). D.C. capital region is a major high-tech hub. Retrieved October 11, 2008, from http://www.aeanet.org/?pressroom/?prjj_cs2008_dccapitalregion.asp
19 See note 3.
20 Maryland Department of Business & Economic Development. (n.d.). Tax incentives. Retrieved October 11, 2008, from http://www.choosemaryland.org/?businessservices/?taxincentives/?taxincentivesindex.html
21 Maryland Department of Business & Economic Development. (n.d.). Business in Maryland. Retrieved October 11, 2008, from http://www.choosemaryland.org/?businessinmd/?businmdindex.html
22 Segall, E. (2008, June 24). Milken Institute ranks Maryland a tech-rich state. Baltimore Business Journal. Retrieved from http://www.bizjournals.com/?baltimore/?stories/?2008/?06/?23/?daily11.html
23 Horrigan, J. B., & Wilson, R. H. (2002). Telecommunications technologies and urban development: Strategies in US cities. International Journal of Technology, Policy, and Management, 2(3), 338-354. Retrieved October 11, 2008, from Inderscience Publishers database.
24 Starner, R. (2002, March). America’s top 60 cybercities. Site Selection. Retrieved October 11, 2008, from http://www.siteselection.com/?issues/?2002/?mar/?p175/
25 Washington Metropolitan Area Transit Authority. (n.d.). Metro approved FY 2008 budget executive summary. Retrieved October 11, 2008, from http://www.wmata.com/?about/?board_gm/?FY2008_Budget_Book_Summ_final.pdf
26 GVA Advantis. (2008). Washington, DC metropolitan area market review second quarter 2008. Retrieved October 11, 2008, from Greater Washington Commercial Association of Realtors Web site: http://www.gwcar.org/?marketnews/?2008/?docs/?Second_Quarter_2008_Market.pdf
27 See note 15.
28 See note 15.
29 National Small Business Association. (2008). 2008 small-business mid-year economic report. Retrieved October 11, 2008, from http://www.nsba.biz/?docs/?trend6_indd.pdf
30 See note 15.
31 U.S. Small Business Administration. (2008, September). Advocacy small business statistics and research. Retrieved October 11, 2008, from http://app1.sba.gov/?faqs/?faqindex.cfm?areaID=24
32 See note 15.
33 See note 15.
34 See note 15.
35 Greater Washington Initiative. (n.d.). Real estate. Retrieved October 11, 2008, from http://www.greaterwashington.org/?regional/?real_estate/?index.htm
36 Greater Washington Initiative. (2008, August 26). News and press releases. Retrieved October 11, 2008, from http://www.greaterwashington.org/?news/?news_press/?082608.htm
37 See note 2.
38 Greater Washington Initiative. (2008, August 21). Area companies dominate Inc. 500 list of fastest-growing companies once again. In News and press releases. Retrieved October 11, 2008, from http://www.greaterwashington.org/?news/?news_press/?082108-2.htm