The idea to transform Lansing’s XYZ Machine Tool and Fabricating Company into a medical manufacturing facility wasn’t difficult for Sagar Sheth and Kory Weiber. After working for General Motors for a number of years and seeing firsthand the pressures facing the auto industry, the men saw the time as an opportunity to take a chance on something new and different.

“We wanted to create a different type of a company,” says Sheth, president of Moebius Technologies. “We wanted to take a company that would have failed and diversify it into an industry that could survive.”

The men admit launching a start-up in the medical field is a risky venture in today’s economy, but say it was fulfilling a dream. “It would have been risky to stay in the auto industry,” says Wieber, company vice president. “We always wanted to go out and make things happen and we feel good about being able to help people at the same time.”

The three-year-old Moebius Technologies Company replaced XYZ, which built polishing machines for the auto racing industry. Moebius specializes in making surgical instruments and orthopedic implants like those used for hip replacements. The company is housed in a 14,000-square-foot facility in the heart of one of Lansing’s hardest hit communities. The closure of two major businesses—including a GM plant—has left the area struggling economically.

However, with the help of the Lansing Economic Development Corporation, Moebius Technologies has been able to breathe new life into the community. “They gave us some parameters and we tried to make the fit,” says Ken Szymusiak, director of LEDC’s south and outer Lansing area. “They were looking all over the mid-Michigan area, so it was important for us to try to find a way to keep them in Lansing.”

Wieber says with help from those at LEDC, Moebius was able to secure tax incentives that allowed for the expansion. “They found us a building in need of an occupant that not only fit our needs but also allowed us to help revitalize the area.” Several months ago, according to Szymusiak, the Lansing EDC also asssited the company by providing low-interest financing for a piece of machinery, which was essential to the company’s continued success.

The hiring of staff started six months after the restructuring process. There are currently eight full-time employees and the men would like to hire more, but financing has been hard to come by.  “The thing that hurts us the most is not having the money available from the financial sector to make things happen,” claims Sheth.  He says even with work contracts already signed, which would guarantee repayment of the loan, banking officials aren’t willing to dole out the cash.  Sheth says if things don’t change and soon, he sees a dire future for business in Michigan and across the country.  “A catastrophic issue is looming for businesses out there, especially those looking to grow. If it doesn’t get fixed quickly, I think many companies won’t survive—not because they don’t have growth opportunities but because there will be no funds to allow them to transition themselves into those opportunities.”

Both Sheth and Wieber are cautiously optimistic about federal pressure being put on the financial sector to loosen loan restrictions and give assistance to small businesses. They say movement in those areas could help not only them, but also the state of Michigan as a whole. “If we had access to good financing, we could double or triple our growth,” says Sheth. “There are a lot of businesses we’ve quoted that we could bring into the state.”

Finding financing for growth isn’t the only roadblock for Moebius Technologies. Michigan’s tax structure is not seen as business-friendly by the partners. “There are benefits to locate in a lot of places across the United States and around the world,” says Sheth. “Michigan needs to compete, and high business taxes are something the state has to work on.” Wieber isn’t as concerned about the effects of the Michigan Business Tax (MBT) on small businesses such as Moebius, but agrees there are drawbacks. “It certainly makes it more difficult to be sustainable.”

Both men applaud lawmakers for working to make the business climate more workable but say more needs to be done. “Michigan has to lead the herd, if you will. It has to lead the pack in supporting business growth and development.” Sheth says, a medical company start-up faces even more challenges to survive than other business sectors. “When you take and change your structure so dramatically—from auto to medical—you have to invest a lot and continue to do that. We are constantly looking to have the latest in technology and are constantly reinvesting.” He admits the company isn’t making a profit yet, but says it’s getting closer every day to hitting that bottom line.

But operating in the black isn’t the only area falling short. Building a reputation is even more important. Michigan isn’t known as a medical state, so Sheth says his company has had to work harder to get that all-important foot in the door. “Most of our business is from out of state. It’s not like the auto industry. It’s a very difficult business to jump into. It’s hard to make friends. We’re careful not to step on any toes.”

Despite some drawbacks, the men say they wouldn’t want to set up shop anywhere but Michigan. “There are a number of engineers and technicians in this area—a lot of laid off automotive workers looking for jobs,” says Sheth. “It’s the technical knowledge that will bring a company to the top of innovation. With so many skilled workers here, it just makes sense to be here.” Adds Weiber, Moebius Technologies enjoys other benefits as well. “We have very low overhead. It’s a young company with a young staff and is able to move and navigate obstacles more quickly.”

Sheth says the bottom line to success is pretty simple. “If your company is willing to do what it takes to be unique and will go the extra mile to satisfy the customer, you can overcome pretty much anything.”