The First Customer Program (FCP) provides assistance to technology startups to address gaps in business development, marketing, and sales. As of April 2015, the FCP has worked with 28 clients and funded 55 projects totaling $999,376, with $753,264 disbursed so far. FCP clients directly created 84 jobs and retained 49 jobs. The conservative payback period for the state's investment is estimated to be 2 years and 2 months, while the optimistic payback period is 1 year and 4 months, based on income and sales tax from new jobs as well as corporate tax from increased revenue.
The CII ASCON Industry Survey for the April – June FY16 quarter reveals a reversal from the earlier trend of slowing growth, with indications of a recovery taking shape in the economy, albeit a slow one. The latest Survey, which tracks the growth of the industrial sector through responses collected from sectoral industry associations, reveals a slight improvement in growth trends in terms of production over the corresponding quarter a year ago.
The CII ASCON Industry Survey which tracks the growth of different industrial and services sectors of the economy, is based on the feedback collected from industry associations affiliated to CII. The industry associations encompass wide range of sectors comprising of small, medium and large enterprises. In most of the cases, these account for approximately 70% of the total industry output in the respective sectors.
The Survey was conducted from mid-June till end of July 2015 and tracks the estimated growth trends in terms of Production, Sales and Exports for Q1 FY 16.Responses have been segregated in the following four broad categories: (i) ‘Excellent’ (growth in excess of 20%), (ii) ‘High’ (growth in the range of 10-20%), (iii) ‘Moderate’ (growth in the range of 0-10%) and (iv) ‘Negative’ (growth less than 0%).
Of the 93 sectors surveyed, the share of sectors that have recorded excellent growth of more than 20 percent in Q1 (April –June) FY16 quarter has surged up to 16.1 percent (15 out of 93 respondents) as against 7.1 percent (8 out of 112) recorded in the year ago period. This is a clear indication of improvement over the last year.
While the share of sectors witnessing a high growth rate of 10 to 20 percent has reduced significantly to 9.7 percent (7 out of 93) in April-June FY16 from 14.3 percent (16 out of 112) during the corresponding period a year ago, the share of sectors reporting moderate growth has declined marginally to 51.7 percent (47 out of 93) as compared to 51.8 percent in the year ago period. At the same time, the number of sectors recording negative growth has fallen from 26.9 percent (30 out of 112) in the first quarter last year to 23.6 percent (21 out of 93) in the first quarter this year.
On the issues and concerns impacting growth, margin pressure from stiff competition, competition from imports, shortage of power, high regulatory burden, lack of domestic and export demand, shortage of skilled labour and talent and high tax burden have been cited as the most important constraints by more than 50 percent of the respondents.
For more classes visit
www.snaptutorial.com
ACC418 Module 1 Assignment 3 Calculating Tax Cost
Microtech Software Corporation (MSC) was founded in 2001. The founder, Chan Li, studied at MIT and worked for a large software corporation before returning to his hometown, Centervale, to set up his own company.
The corporate tax rate structure applicable in Centervale is as follows:
For more classes visit
www.snaptutorial.com
ACC418 Module 1 Assignment 3 Calculating Tax Cost
Microtech Software Corporation (MSC) was founded in 2001. The founder, Chan Li, studied at MIT
For more classes visit
www.snaptutorial.com
ACC418 Module 1 Assignment 3 Calculating Tax Cost
Microtech Software Corporation (MSC) was founded in 2001. The founder, Chan Li, studied at MIT and worked for a large software corporation before returning to his hometown, Centervale, to set up his own company.
The CII ASCON Industry Survey for the April – June FY16 quarter reveals a reversal from the earlier trend of slowing growth, with indications of a recovery taking shape in the economy, albeit a slow one. The latest Survey, which tracks the growth of the industrial sector through responses collected from sectoral industry associations, reveals a slight improvement in growth trends in terms of production over the corresponding quarter a year ago.
The CII ASCON Industry Survey which tracks the growth of different industrial and services sectors of the economy, is based on the feedback collected from industry associations affiliated to CII. The industry associations encompass wide range of sectors comprising of small, medium and large enterprises. In most of the cases, these account for approximately 70% of the total industry output in the respective sectors.
The Survey was conducted from mid-June till end of July 2015 and tracks the estimated growth trends in terms of Production, Sales and Exports for Q1 FY 16.Responses have been segregated in the following four broad categories: (i) ‘Excellent’ (growth in excess of 20%), (ii) ‘High’ (growth in the range of 10-20%), (iii) ‘Moderate’ (growth in the range of 0-10%) and (iv) ‘Negative’ (growth less than 0%).
Of the 93 sectors surveyed, the share of sectors that have recorded excellent growth of more than 20 percent in Q1 (April –June) FY16 quarter has surged up to 16.1 percent (15 out of 93 respondents) as against 7.1 percent (8 out of 112) recorded in the year ago period. This is a clear indication of improvement over the last year.
While the share of sectors witnessing a high growth rate of 10 to 20 percent has reduced significantly to 9.7 percent (7 out of 93) in April-June FY16 from 14.3 percent (16 out of 112) during the corresponding period a year ago, the share of sectors reporting moderate growth has declined marginally to 51.7 percent (47 out of 93) as compared to 51.8 percent in the year ago period. At the same time, the number of sectors recording negative growth has fallen from 26.9 percent (30 out of 112) in the first quarter last year to 23.6 percent (21 out of 93) in the first quarter this year.
On the issues and concerns impacting growth, margin pressure from stiff competition, competition from imports, shortage of power, high regulatory burden, lack of domestic and export demand, shortage of skilled labour and talent and high tax burden have been cited as the most important constraints by more than 50 percent of the respondents.
For more classes visit
www.snaptutorial.com
ACC418 Module 1 Assignment 3 Calculating Tax Cost
Microtech Software Corporation (MSC) was founded in 2001. The founder, Chan Li, studied at MIT and worked for a large software corporation before returning to his hometown, Centervale, to set up his own company.
The corporate tax rate structure applicable in Centervale is as follows:
For more classes visit
www.snaptutorial.com
ACC418 Module 1 Assignment 3 Calculating Tax Cost
Microtech Software Corporation (MSC) was founded in 2001. The founder, Chan Li, studied at MIT
For more classes visit
www.snaptutorial.com
ACC418 Module 1 Assignment 3 Calculating Tax Cost
Microtech Software Corporation (MSC) was founded in 2001. The founder, Chan Li, studied at MIT and worked for a large software corporation before returning to his hometown, Centervale, to set up his own company.
This presentation says about concepts and methods to measure National income, Estimation of national income pre and post independence and trends over years
Payback period (PP) is the number of years it takes for a company to recover its original investment in a project, when net cash flow equals zero. In the calculation of the payback period, the cash flows of the project must first be estimated. The payback period is then a simple calculation.
This presentation says about concepts and methods to measure National income, Estimation of national income pre and post independence and trends over years
Payback period (PP) is the number of years it takes for a company to recover its original investment in a project, when net cash flow equals zero. In the calculation of the payback period, the cash flows of the project must first be estimated. The payback period is then a simple calculation.
This pdf is only to learn payback, timevalue of money and IIr
and there example are also given by me to easy to lean there example if any doute then contact me...
Canada’s small- and medium-size enterprises
(SMEs) are collectively the largest employer in
Canada, employing about 55 per cent of
Canadians (based on Statistics Canada’s Survey
of Employment, Payrolls and Hours 2008).
When you take into account the fact that they
contribute 1.4 times the premiums their
employees do, this makes them the single
largest employer-stakeholder group in the EI
system today. SMEs employ Canadians in every
province and in every sector of the economy,
from the retail and service sectors to
manufacturing and primary industries. This
broad range of industries and employee
requirements make SME owners an excellent
judge of the efficacy of the EI system.
EI is becoming a more and more important
issue for SMEs. In fact, EI is one of the top
priorities for CFIB members across the nation.
This was highlighted in a survey conducted in
the first half of 2009, which found that 48 per
cent of CFIB members listed EI reform as a
priority for their business, behind only the
total tax burden and regulations and paper
burden, both of which are also directly related
to the EI system.
International Journal of Engineering Research and Applications (IJERA) is an open access online peer reviewed international journal that publishes research and review articles in the fields of Computer Science, Neural Networks, Electrical Engineering, Software Engineering, Information Technology, Mechanical Engineering, Chemical Engineering, Plastic Engineering, Food Technology, Textile Engineering, Nano Technology & science, Power Electronics, Electronics & Communication Engineering, Computational mathematics, Image processing, Civil Engineering, Structural Engineering, Environmental Engineering, VLSI Testing & Low Power VLSI Design etc.
This slide deck outlines the models CBO uses to assess the budgetary effects of alternative economic scenarios such as those presented in CBO’s Current View of the Economy in 2023 and 2024 and the Budgetary Implications (November 2022).
Rana alyousef Macro H.W 1 miss miryam College of .docxmakdul
Rana alyousef
Macro H.W 1 miss miryam
College of Business Administration
ECON 1311- Macroeconomics
Homework 1 (10% of total grade)
Student’s Name:
Faten alnassar
Student’s ID:
201302248
Course Section:
Mark out of
%
Letter grade
Maximum Grade
10
100
A+
Student’s Grade
INSTRUCTIONS:
Answer all the questions below. Your answers can be either handwritten or typed on a computer. Please, don’t forget to include your name, ID and course section on your homework.
Hand in your homework as a hard copy either to me in person or leave your homework in the box in front of my office F098. The deadline for submission is Thursday, October 13, 2016. Submission after the deadline is under no circumstances possible.
The homework will account for 10% of your final grade.
QUESTIONS:
1) GDP (Gross Domestic Product)
Newspaper article:
Focus Economics August 24, 2016:Europe’s largest economy lost some steam but outperformed expectations in the second quarter of this year. GDP grew 0.4% quarter-on-quarter, down from Q1’s two-year high of 0.7%. Trends within the domestic economy were divergent, with investment performing weakly and consumption remaining robust. Fixed investment deteriorated, swinging from Q1’s 1.7% increase to a sharp 1.5% drop in Q2, marking the largest fall in over four years. A temporary decline in construction investment was partly behind this fall: construction activity was exceptionally strong in Q1 as a mild winder allowed it to be front-loaded and Q2’s drop reflects normalization in construction. Conversely, household and public spending continued to support growth in Q1, though to a lesser extent than in the previous quarter. Private consumption slowed but still grew 0.2%. A strong labor market, rising wages and subdued inflation have been fueling private consumption in recent quarters and continued to do so in Q2. Government consumption decelerated but remained solid at a 0.6% growth rate in Q2.
a.) According to the above news article by how much did the German economy grew in the second quarter of 2016? (0.5 Points)
0.4%
b.) List the components of the GDP equation that are mentioned in the news article. (1 Point)
Government expenditure
Consumption (Private consumption)
Investments (fixed and construction investments)
c.) By how much did each of the components of the GDP equation grew in Q2 2016?(2 Points)
Government expenditure= 0.6%
Investments= Decreased by 0.2%
Consumption = 0.2%
2.) Calculate GDP
Item
Billions of $
Consumption expenditure
8,000
Investment
3,000
Government Expenditure
2,000
Exports
10,000
Imports
6,000
a.) Calculate the GDP of the economy in the table above.(1.5 Points)
GDP=G+I+C+NX
GDP=$2,000+$3,000+$8,000+ $(10,000-6,000)
GDP= $17,000
3.) Unemployment
The table below shows the results of a labor survey for an imaginary country. Use the numbers to answer the questions below.
Population
Working age population
Non-working age population
Labor force
employed
unemployed
Total
500, ...
CBIZ Manufacturing & Distribution Quarterly Newsletter – June 2021CBIZ, Inc.
This issue newsletter tackles two of the hottest topics for the Manufacturing & Distribution sectors – supply chain challenges and the newly supercharged employee retention tax credit (ERTC). The article on innovations in employee benefits informs another critical operational issue – that of staffing – as employee benefits are key to recruiting and retaining qualified employees. Articles on managing insurance costs (and links to a pre-renewal data checklist) and how to work with the U.S. Commercial Service to access global markets round out this packed issue. As an added bonus, News from the NAM provides cutting edge industry commentary.
FAQs about the Affordable Care Act’s (ACA) Employer Shared Responsibility Rep...CBIZ, Inc.
The Affordable Care Act (ACA) is a monumental change to our healthcare system, and with new reporting requirements comes new questions. This fact sheet provides answers to the most frequently asked questions to help you better understand the ins and outs of the ACA.
CBO uses its microsimulation tax model to simulate the effects of tax rules for a representative sample of tax filers in each year of the budget window. The model informs much of CBO’s analysis of the individual income and payroll tax system.
Presented the Warmilu IncuBlanket and heat technology to a group of Ministry of Health officials, County Health officials, Chief Medical Officers, Chief Nursing Officers, neonatologists, pediatricians, and other key influencers seeking positive impact in maternal and infant health. We discuss the Warmilu technology and challenges in infant warming as well as context for applications. Presented by Grace Hsia, CEO, on 3/31/2016 at the Sarova Panafric Hotel.
FCP-Economic Impact Analysis and Payback Period Analysis gh Denise vc 1.1
1. 1
First Customer Program
Economic Impact Analysis & Payback Periods for the
State
(9/2012-5/2015)
Introduction
The First Customer Program (FCP) assists technology start-ups with identifying and addressing critical
gaps in business development, marketing, and sales. The FCP is funded by the Michigan Strategic Fund
with program oversight by the Michigan Economic Development Corporation (MEDC) and administered
by the University of Michigan Institute for Research on Labor, Employment, and the Economy
(IRLEE). As of April 2015, there have been 55 co-funded projects among 28 clients. This report compares
the cost of funding the FCP with the payback period to the state of Michigan. The program award totals
$999,376; currently, $753,264 has been disbursed between December 2012 and April 2015. In total, FCP
clients created 170.3 new full time equivalent (FTE) jobs with 84 directly attributed to the FCP. 344 FTE
jobs were retained among FCP client companies that were provided services. Of these, 18 FCP clients
credited retaining 49 jobs directly because of FCP support through full assessment, delivery of Market
Specific Overview and/or Action Plan, and execution of projects.
This report features a conservative payback period estimate reviewed by the FCP, IRLEE, and other
University of Michigan economists. The other University of Michigan economists have a contract with
MEDC to update and improve current payback period estimates using the Regional Economic Models
Inc. (REMI) model; however, the FCP and IRLEE team do not have access to the REMI model. As a result,
the FCP and IRLEE team used the Regional Input-Output Modeling System (RIMS) to calculate the
payback period. Numbers presented for job creation, job retention, and sales may have been collected
after the MEDC reporting period and therefore do not match MEDC progress reports.
The payback period to the state of Michigan has been calculated by estimating 1) income tax and sales
tax from job growth and 2) the corporate tax from revenue growth. FCP was directly attributed to the
creation of 84 jobs created directly attributed by clients to FCP support to date. The conservative
payback period to the state is estimated to be 2 years and 2 months and the optimistic payback period
to the state 1 year and 4 months as seen in Figure 1.
3. 3
Methodology & Analysis for Job Creation, Income Tax, & Jobs Impact
To estimate income tax and sales tax, the first step was to survey the job creation attributed to FCP. To
track this, FCP has clients fill out a self-reported survey biannually across reporting periods that begin or
end on October and April. This survey quantifies the total jobs created. Then, each client was verbally
surveyed to ask if the new job creation was attributed to FCP activity; if new jobs were created and
attributed to FCP activity, this total job creation figure was then discounted by the general industry job
growth. A second adjustment is made to the total jobs created to account for the broader economic
impact of job creation. Finally, the payback periods to the state were calculated from income tax arising
from job creation.
Survey Results
Data gathered for three reporting periods (Table 1) show a consistent increase in revenue and jobs
created by FCP clients as the program progresses. A total of 84 jobs were created directly as a result of
FCP activity.
Table 1: FCP Survey Results 2013-2015
Period Dates Jobs Created Increase in Revenue
1 Oct 2013- Apr 2014 8.0 $237,000
2 Apr 2014- Oct 2014 10.5 $367,204
3 Oct 2014- Apr 2015 65.5 $2,833,656
Total 84.0*
$3,437,860
*Please note the total number differs from MEDC Progress Report Oct 2014 – Apr 2015 based on updated
information from clients.
Adjustment for Industry Growth
It would be incorrect to assume that FCP clients would not experience any natural growth or decline had
FCP intervention not occurred. To account for this, the calculation discounts jobs created due to FCP
activity by the jobs growth by client’s industry. The Bureau of Labor Statistics (BLS), State and Area
Employment’s customized tables provide the monthly employment numbers in Michigan for a particular
industry. Had FCP intervention not taken place, the FCP estimates the client’s growth or decline to be
equivalent to that of the industry for a given period.
Most FCP clients are new technology start-ups and do not have a corresponding niche industry
classification. In such cases, a broader classification was used. For example, Arborlight LLC, an electrical
equipment and appliance manufacturing company was classified as a durable goods manufacturer and
Detroit R&D Inc., a biotechnology manufacturing company, was classified as a non-durable goods
manufacturer.
For each of the three reporting periods, the percentage change in employment is calculated (Eq. 1) from
the BLS data corresponding to the client’s industry. From the percentage change and the number of
initial full-time employees (FTEs) at the start of each reporting period, the expected change in
employment was calculated for each client. The expected change was subtracted from the number of
FTEs created due to FCP activity to calculate the effective jobs created due to FCP activity adjusted for
industry growth (Eq. 2).
Eq.1 Industry Job Growth (%) = Change in Employment / Initial Employment [for each period]
Eq. 2 Effective Jobs Created = FCP Jobs - {Initial FTEs x (Industry Job Growth) (%)}
4. 4
The calculations only consider clients who attributed growth to FCP activity. If client change in
employment was not attributed to FCP, the calculation disregards those jobs created and any industry
growth or decline.
Adjustment for Economic Multiplier
Growth in business results in increased purchasing and spending and has a broader economic impact in
a region. For instance, as a company grows, it purchases more from suppliers and increases in income
result in increased spending in the region. The Bureau of Economic Analysis (BEA) Regional Input-Output
Modeling System (RIMS)1
is used to estimate this impact. The FCP use change in employment numbers
as the basis for measurement. For each job created by an FCP client, the multiplier2
estimates change in
overall jobs in Michigan. The estimate includes client new job creation.
The RIMS provides estimates for three types of economic impact that resulted from client’s growth.
1. Direct Impact (Tier-1 Suppliers): Economic impact as a direct consequence of the first round of
inputs purchased by FCP clients.
2. Indirect Impact (Tier-2 and beyond Suppliers): Economic impact related to the subsequent
rounds of inputs purchased by supporting industries. The sum of direct and indirect impacts is
also known as inter-industry effects.
3. Induced Impact (Household Spending): The increase in spending on goods and services as a
consequence of changes to the payroll of the directly and indirectly affected businesses.
Using RIMS, the FCP developed a conservative and optimistic estimate for the payback period to the
state of Michigan based on total job growth attributed to FCP assistance. The conservative estimate
relates to the direct and indirect impacts of employment (Impacts 1 & 2). The optimistic estimate
considers direct, indirect, and induced impacts (Impacts 1, 2 & 3). For each client, the RIMS3
multiplier is
applied to the effective number of employees created. Table 2 shows the results of the calculations.4
The following results are used as inputs in calculations for conservative and optimistic payback periods
to the state.
Table 2: Results and Impact of Jobs Created
Period Dates Jobs Created Due to
FCP1
Conservative Jobs
Impact2
Optimistic Jobs
Impact3
1 Oct 2013- Apr 2014 8.0 17.02 28.44
2 Apr 2014- Oct 2014 10.5 18.10 29.44
3 Oct 2014- Apr 2015 65.5 129.23 213.53
TOTAL 84.0 164.35 271.41
1
Obtained from client surveys.
2
Include direct and indirect impacts of employment (RIMS Type -1).
3
Include direct, indirect and induced impacts of employment (RIMS Type-2).
1
The Bureau of Economic Analysis (BEA) Regional Input-Output Modeling System (RIMS)1
is used to estimate this impact. is widely used in
private and public sectors for estimating the economic impact of an event based on output, earnings or employment in one industry.
<https://bea.gov/regional/pdf/rims/RIMSII_User_Guide.pdf>
2
The RIMS direct effect employment multiplier estimates the change in number of jobs in all industries for every additional job in the industry
corresponding to the entry.
3
United Stated. Bureau of Economic Analysis. RIMS II Multipliers. Michigan (Type 1)N.p.: n.p., n.d. Print
4
The Excel workbook can be provided upon request, contact FCP for further information.
5. 5
a. Calculating Income Tax
To calculate the payback to the state from income tax, the average tax return per new FTE was
estimated using a tax per capita survey by the U.S. Census Bureau (2014 Annual Survey of State
Government Tax Collections) using Equation 3. In Michigan, the total individual income tax collected was
$7.874 billion and the total population of working adults (aged 18 and over) in Michigan was 7.56
million.5
Eq. 3 IncomeTaxPerCapita=TotalIndividualIncomeTaxCollected/TotalPopulationofWorkingAdults
The resulting estimated income tax per capita totaled $1,041.53.
b. Calculating Sales Tax
The total sales tax per capita collected may be estimated using Equation 4. In Michigan, the total sales
tax collected was $12.309 billion and the total population of working adults (aged 18 and over) in
Michigan was 7.56 million.6
Eq. 4 Sales Tax Per Capita = Total Sales Tax Collected/Total Population of Working Adults7
The resulting estimated sales tax per capita totaled $1628.17.8
There are two reasons why using the average tax collection per capita in Michigan for income tax and
sales tax is a defendable approximation for new FTE tax returns. First, the jobs resulting from direct,
indirect and induced impacts encompass all industries in Michigan. Second, for jobs created by FCP
clients, the FCP collected salary information directly from each client reporting job creation. The average
salary for a new FTE position directly attributed to FCP was $53,849. This average is higher than the
Michigan 2014 annual mean wage of $45,000; therefore the approximation for the total new FTE tax
returns is conservative.
5
“Profile of General Population and Housing Characteristics: 2010 , Michigan” U S Census Bureau
6
“Profile of General Population and Housing Characteristics: 2010 , Michigan” U S Census Bureau
7
Though the FCP team recognizes that the total sales tax may be collected from working adults and other entities such as a small business or sole
proprietor, most sellers do not track whether the purchaser is a working adult or other entity. This also recognizes that businesses with less than
$350,000 in allocated or apportioned gross receipts and/or less than or equal to $100 in annual liability are not required to file or pay the
Corporate Income Tax (CIT). This calculation is an approximation which provides a conservative estimate of the total sales tax per capita.
(Source: Michigan Taxes. Michigan Department of Treasury. http://www.michigan.gov/taxes/0,4676,7-238-59553---,00.html )
8
Sales Tax Per Capita = Total Sales Tax Collected/Total Population of Working Adults = $12.309 billion/7.56 million = $1,628.17
6. 6
Methodology and Analysis for Revenue Increase, Corporate Tax, and
Revenue Impact
To estimate sales tax, the FCP has clients fill out a self-reported survey biannually to quantify new or
increases in client revenue attributed to FCP activity. Finally, the payback periods to the state are
calculated including corporate and sales tax arising from new revenue or increases in revenue.
Survey Results
Data gathered for three reporting periods (Table 1) show a consistent increase in revenue. $3.4 million
is the total increase in revenue for FCP clients since engagement with the FCP and $1,627,860.22 is the
total revenue increase as a direct result of FCP activity.
Calculating Corporate Tax
FCP clients experienced a total increase in revenue of $3.4 million since engagement. 12 clients claimed
FCP was directly responsible for $ 1,627,860.22 in new or increased revenue9
. Earnings before interest,
taxes, depreciation, and amortization (EBITDA) can be used to analyze and compare profitability
between companies and industries because it eliminates the effects of financing and accounting
decisions.
The EBITDA ratio for the technology sector was 21% for Q1 2015.10
The resulting earnings for FCP clients
total $341,850.11
The corporate tax12
return at 6 %13
collected from these earnings totals $20,511.
9
The FCP recognizes that businesses with less than $350,000 in allocated or apportioned gross receipts and/or less than or equal to $100 in
annual liability are not required to file or pay the Corporate Income Tax (CIT). All FCP clients attributing increase in revenue have demonstrated
gross receipts in sales of greater than $350,000 or otherwise do not qualify for that exemption.
10
"CSI Market." Profitability by Quarter, Gross, Operating and Net Margin from 1 Q 2015. N.p., n.d. Web. 25 June 2015.
11
$341,850= 0.21 x $1.627 million
12
Michigan corporate tax = 6% (Source: IRS)
13
The Michigan Corporate Income Tax (CIT) of 6% for C corporations and taxpayers taxed as corporations federally was used versus trying to
include the small business alternative credit which offers an alternate tax rate of 1.8% of adjusted business income. This is to provide a more
conservative approximation of corporate tax returns. (Source: Michigan Taxes. Michigan Department of Treasury.
http://www.michigan.gov/taxes/0,4676,7-238-59553---,00.html )
7. 7
Methodology for Payback Period for the State Investment
The payback period for the state may be calculated as a total of income tax and sales tax arising from
effective jobs created due to FCP adjusted for industry growth and corporate tax derived from new or
increased revenue (Eq. 5).
Eq. 5 Payback Period to State = Corporate Tax + Income Tax (j) + Sales Tax (j) [j: jobs created]
Multiplying these average income tax and sales tax per capita with the conservative and optimistic jobs
estimates yields total payback period to state. Table 3 provides a summary of results.
Table 3: Payback Period for the State Investment
Conservative Optimistic
Direct and Indirect Direct, Indirect, and Induced
Job Creation including
Multipliers
164.35 271.41
Corporate Tax $20,511 $20,511
Income Tax Return $171,175.46 $282,681.66
Sales Tax Return $267,589.74 $441,901.62
Total Returns $459,276.20 $745,094.28
Payback Period*
2.18 (2 years 2 months) 1.34 (1 year 4 months)
*
Payback period is based on FCP program total award of $999,376 for grant period 12/01/2012 to 11/30/2015.
8. 8
Conclusion on First Customer Program Economic Impact Analysis
FCP has had the opportunity to demonstrate considerable economic impact within the state of
Michigan. In total, FCP clients created 170.3 new full time equivalent (FTE) jobs with 84 directly
attributed to the FCP. 344 FTE jobs were retained among FCP client companies that were provided
services. Of these, 18 FCP clients credited retaining 49 jobs directly because of FCP support through full
assessment, delivery of Market Specific Overview and/or Action Plan, and execution of projects. On
average, the program spent $1,198.59 of grant money retaining 1 full time position. The program spent,
on average, $3,285.37 of grant funding to create 1 full time job. The conservative payback period to the
state is estimated to be 2 years and 2 months and the optimistic payback period to the state 1 year and
4 months as seen in Figure 1.
The FCP team has developed a method for identifying critical business development, marketing, and
sales gaps in startups. FCP is a useful entrepreneurial resource for early stage startups and those that
have revenue under $5 million seeking a repeatable and scalable sales model. FCP’s identification of key
projects and providing co-funded support has helped startups significantly scale up business
development, marketing, and sales efforts.
To continue supporting the FCP and its expansion, the FCP team recommends expanding reach through
Mid- and Western Michigan. Bringing on additional professional personnel would help the team expand
regional expansion efforts on the ground, expand bandwidth to assess a larger portfolio of startup
clients, and speed up response time and the delivery of market intelligence, Market Specific Overviews,
Action Plans, and projects to clients.
Another way to support the FCP could include increasing the amount of grant funding that may be
awarded per client. Currently co-funding is up to $25,000 per client which means that a project or series
of projects may total $50,000. It may be useful to increase the amount of co-funding that may be
awarded per client; less experienced startup teams average 3 projects with $25,000 but more
experienced startup teams average 5-6 projects. Increasing the co-funding which may be awarded per
client may increase the spectrum and depth of assistance provided through FCP projects.
Finally, it may be useful to increase the funding for projects overall to provide the FCP team with the
ability to award more potential projects to a greater number of eligible clients.
Impact on Regional Partners
The First Customer Program (FCP) has also demonstrated considerable impact on its employees and
regional consultants. The FCP works with a larger network of consultants in and around Michigan. Many
of the consultants are small businesses directly benefiting from FCP projects. Of the total $999,376 grant
funding, $303,000 was spent on consultants. The FCP employs a director, a program manager and part-
time research associates. Over the course of the program this amounted to a total taxable payroll of
$232,604. Research associates are graduate level students many of whom gained valuable experience
for future positions. Ten associates, including 4 who were international students, have since begun
working full time, sponsored, and salaried positions with Michigan companies.