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North Texas 2007

North Texas 2007. Opportunities and Crisis Huntley Paton Dallas Business Journal. 2007: 4 key areas to watch. Entrepreneurial sector --startups, overall business count and venture capital flow Corporate expansions and relocations

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North Texas 2007

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  1. North Texas 2007 Opportunities and Crisis Huntley Paton Dallas Business Journal

  2. 2007: 4 key areas to watch • Entrepreneurial sector --startups, overall business count and venture capital flow • Corporate expansions and relocations • Business climate – government decisions at local, state, national levels • Competition between municipalities

  3. 2006: Thumbs Up • 22 industries polled, none bearish • Distribution Logisitics – I-20, Alliance, etc. • Technology – RFID (TI, GlobeRanger)

  4. 2006: Thumbs Up cont. • Corporate relos, expansions back – Vought, Ameriquest, TI, Countrywide, T-Mobile, etc. • D-FW still seen as good value – Calif. • Trade! Top exporter; new CAFTA treaty

  5. Entrepreneurial sector • D-FW has a rich history of entrepreneurial innovation • All North Texas boom cycles have been marked by remarkable entrepreneurial achievement • “Small biz” is the key sector of the economy here and in U.S.

  6. Capital flow better (kinda) • Private equity – 1Q investments in local cos. totaled $274 million, up from $118 million a year ago, and up from $185 million in 4Q 2005 and $166.3 million in 3Q 2005 • 2005 total -- $630.3 million, up from $473 million in 2004. In 2000, it was $2.4 billion • New idea? Cheer up: Three of 11 venture deals were “first round” • Still dominated by tech, but also including energy, real estate, financial, health care • Pipeline ‘plugged’ by Sarbanes?

  7. Business Counts Are Climbing • Estimated number of U.S. businesses with 1-100 workers • 2000 – 7.4 million • 2001 – 7.1 million • 2002 – 6.9 million • 2003 – 7.05 million • 2004 – 7.15 million • 2005 – 7.35 million

  8. Small Biz Concerns • – only 52% of small biz offers health benefits, down from 60% during the boom. 78% of small business owners say their No. 1 anxiety is the cost of health insurance and employee benefits -- Texas: 1-in-4 people not insured: worst in country -- 700,000 uninsured in Dallas County alone -- illegal immigrants but also epidemic of “voluntarily uninsureds” with incomes of $50k-plus -- 80 percent of uninsured are business owners or full-time workers -- Senate just killed small-biz insurance bill

  9. Small Biz concerns (cont.) • Litigation – NFIB cites it as No. 2 concern, liability insurance and litigation expense now $88 billion a year • Compliance with federal workplace regs -- $91 billion a year • Paperwork burden up 5.5% this year and 17% since 1999. • Local ordinances viewed by small-biz owners as more important than anything at state or federal levels

  10. Sales Remain Extremely Local The local business climate matters because ‘local’ is where it all happens Source of Company’s Revenue 2004 2000

  11. Metroplex Small Biz Climate: Nothing to Brag About 2000-2003 • Dallas-Fort Worth ranked 43rd out of 50 metros in “Best Cities for Small Biz” study, January 2006 • While North Texas population grew 8.2%, but jobs declined • D-FW’s small-business counts per 100,000 residents fell 4.5% -- worst in nation • Top cities: Miami, Vegas, Orlando, Minneapolis, Seattle, all had vibrant sectors in tourism, trade or education

  12. North Texas Challenge • Premise: Not a “hub-and-spoke” market • Quilt patches – some bigger than others, all tied together in a way, but also distinct, independent, entities • Each city sets its own economic agenda • All assets can be moved or duplicated • It’s a street fight

  13. Dallas – Hole in the Donut? • Dallas proper not competitive with suburbs in costs, policies, school quality, red tape, incentives. • Leadership issue – too fractured. (Strong mayor?) Corruption concerns. • Constantly losing market share in dollars, jobs, brain power, etc. • Not “ready” to host a political convention????? • Potential still huge – Trinity, Downtown, etc. • Downtown class A vacancies soon to reach 3 million sq. ft. • Downtown needs small business • Wright Amendment

  14. How can Dallas help itself? • Get head out of clouds, out of sand • Take a drive up the Tollway • Benchmark competitive standards vs. local rivals – and beat them across the board • Foster entrepreneurship • Take advantage of demographic shifts • Have a “Bob Stimson moment” • Protect Love Field – get tough, bloody some noses

  15. Huntley Paton Publisher hpaton@bizjournals.com To subscribe: 214-706-7147 Web products: dallas.bizjournals.com

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