A Look At New Business In One Connecticut Community

DANBURY

Pat Kovac and Mark Henques always wanted Federal Road in Danbury.

They entertained other towns and cities, but as Hat City natives, they wanted to start their business in their hometown. Their wish came true when an ideal spot to open their Robeks franchise became available on the busy road.

In the process of opening, they found that there were other good reasons to start a business in Danbury. Working with the city, they found, was not the regulation and approval headache that can occur in some other cities.
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They also said their cost analysis showed that taxes and rents were lower than in the other cities and town they had considered.

“We worked with a contractor who does a lot of business in Danbury and he said the city is great to work with … very pro-business,” said Kovac, who opened his store with Henques in July 2015. “Danbury worked around us and we opened the day we asked for.”

Hotel Zero opened last month on the city’s west side. Randy Salvatore, CEO of RMS Companies, said the dealings with the various city departments led to quick construction.

“We were treated objectively and friendly,” he said. “We like to do business in places like that and we look forward to future developments.”

Salvatore, Kovac and Henques are not alone in choosing Danbury as a place to start their business. According to a recent survey by the personal finance website wallethub.com, Danbury ranked as the best small city in the state to start a business.

The survey ranked nearly 1,300 cities in the country based on business environment, access to resources and business costs.
Danbury did not fare well in the national rankings, placing 339th, but it was the top small city in Connecticut. The next Connecticut city in the rankings was Westport, which came in at number 550 nationally. Bristol was next at 791.

“It’s a good honor to have for me, personally, because that’s been a main focus of my administration, to make it easier to start and expand a business,” Mayor Mark Boughton said. “That’s why we started places like the Innovation Center and Hackerspace so people can develop and test their business ideas. At the end, those ideas will spin off into businesses and those businesses will spin off jobs.”

According to data provided by the Connecticut Data Collaborative, Danbury ranks fourth in the state in business formation in 2016, trailing Stamford, Bridgeport and Greenwich. A total of 833 business entities have been formed in Danbury this year. Entities include most businesses types, including LLC, LP, LLP, S corps. and nonprofits.

“There have been a lot of surveys over the years. I think a lot goes back to us realizing we can’t be too dependent upon any single industry. We have a very diverse business community in Danbury,” Stephen Bull, president of the Greater Danbury Chamber of Commerce, said. “Other parts of the state have learned that they are very vulnerable to a slow down in a particular industry. With our business diversity, we can weather economic storms.”

Bull added that Danbury has the panache of Fairfield County, but is not as expensive as towns and cities along the coast.
“Yes, we are in Fairfield County, but in northern Fairfield County,” he said. “We don’t have the sticker shock as much as the Gold Coast of southern Fairfield County.”

It is not by accident that Danbury ranks so highly in the state in terms of best places to start a business. Boughton has made being pro-business a hallmark of his administration. Earlier this year he took the economic development office and turned it into the Office of Business Advocacy. Roger Palanzo runs that office and is tasked with making the city an attractive place for small- and medium-sized business.

“We have some big companies and more coming soon, but still the backbone of our economy is the small- and medium-sized business,” Boughton said. “They need support and it’s important that we are there for them.”

A strong core helps to keep the local economy going when the larger businesses downsize and lay off workers. Last week, FuelCell Energy laid off 96 workers and Boehringer Ingelheim laid off 120 workers.

To keep that small-business core strong and growing, Danbury offers a wide variety of assistance for entrepreneurs and business owners. Organizations such as the Small Business Development Center, SCORE and American Job Center have a strong presence in the city. Danbury Library and Western Connecticut State University often hold business workshops and seminars.

The Small Business Development Center, which offers a variety of services and advice for business owners, has recently made gaining access to capital a priority in Danbury.

“The fact that Danbury has a lower cost of living might be an attraction to some,” Nelson Merchan, business adviser with the Connecticut Small Business Development Center, said. “Danbury is a very diverse community which makes it attractive to start and or run a business. New opportunities are available for all including immigrants and other minorities.”

The diverse population of the city was another attraction for Robeks franchisees Kovac and Henques.

“Danbury is still a growing city, unlike much of the state,” Henques said. “Population and diversity is important. We’re lucky to have a large range of customers that greater Danbury provides.”

Danbury’s population has increased 8 percent since 2000, according to census figures.

Boughton also supported the creation of the Innovation Center and Hackerspace at the Danbury Library. Hackerspace, under the direction of Mike Kaltschnee , serves as a place for entrepreneurs to build upon their business ideas and turn them into reality. It has already helped to launch several small businesses, such as the design firm Born and website developer UpDesign Media.

“Danbury is becoming the hub for innovation in the state,” Bull said.