AN ECONOMIC DEVELOPMENT STRATEGY

Business Retention & Expansion

WEDA Summer Economic Development Conference – August 18, 2010Presented by Lisa Johnson, Executive DirectorGoshen County Economic Development Corporation

Healthy communities have healthy businesses

Business retention and expansion programs assist small businesses to prevent

relocation and help them survive difficult times.

#1 economic development activity in US. REAL JOB GROWTH OVER TIME

COMES FROM LOCAL BUSINESS EXPANSION.

Purpose

Establish relationshipsStrengthen existing companiesEstablish early warning signs to flag at-risk

businesses that require assistanceEnsure that public programs meet business

needs

Advantages

Local businesses have strong community tiesLess expensive than recruitment, attractionYields more jobsIdentifies and directs resources to growth

companiesDefines clear role for economic development

organization

Outcomes

Link expanding businesses with public programs to mitigate growing pains and regulatory issues

Improved communication and partnershipsStrong public image for economic developmentStrategic plan for improved business climateImproves infrastructure, making communities

more attractive for future investmentBusiness cluster strategiesSuccess stories documenting company and

economic growth

Economic Impact

Average community derives 76% of new jobs and capital investment from existing business

Business attraction = 15%Entrepreneurship = 9%In a rural area, the

contribution of existing businesses is likely to be 86 - 90% because both business attraction and entrepreneurship will contribute less.

Looking at the source of jobs in a community gives insight into the importance of business retention

Assessment of business climate

1. Form steering committee2. Develop business list3. Invite broad cross-section to serve on task

force4. Train the task force5. Interview businesses in teams of 26. Address immediate needs7. Review survey results and strategize8. Implement projects9. Follow-up visits

Task Force Members

Inclusive, broad representation geographically and by sector

Economic developmentChamber of commerceCity, county, state governmentSchools, collegeCooperative extension serviceUtility companiesWorkforce centerNonprofit leadersBusiness communityvolunteers

Synchronist Survey System

Provided by our friends at the Wyoming Business Council

Microsoft Access system e-Synchronist System® and

Synchronist Business Information System® from Blane, Canada Ltd.

Team interviews companyEnter data onlineGenerate reports with local,

state infoWBC pays local ED for

surveys of primary industry

Survey design

Questions designed to gather predictive data corporation’s growth plans community problems if any need or desire for assistance perception of place in the community perception and level of awareness the company may have

of the officials themselvesInterview strategy leads to an understanding of

value of the company to the community satisfaction levels growth potential potential risk of the firm leaving the community or

downsizing

Improving the Business Climate

Support and services to help companies increase sales and grow in the community

• Finance

• Incentives

• Taxes

• Real estate

• Workforce issues

• Regulations

• Technology

The degree to which business retention and expansion programs

are linked to other community programs such as loan funds or

workforce training initiatives can have a significant impact on

program effectiveness.

Evaluation

Quantitative Measures

# jobs created/retained# retained businessesCost per job created/retained# businesses visited# businesses surveyed# at-risk businesses assisted% jobs held by local residents/low-income

personsAverage salary of jobs createdSpinoff private investment

Qualitative Measures

Business perceptions of local governmentBusiness perceptions of the communityRelationship between business retention

programs and city services available to businesses i.e. workforce initiatives

Involvement of assisted businesses in community activities

85% of new jobs come from Business Retention and ExpansionMcAllen, Texas

The McAllen Economic Development Corporation

has taken a new approach in recruiting new

investment to our region. Since 2001, MEDC has

been actively working with companies …which

allows the staff to stay informed with the needs of

local businesses. Due to the different obstacles

and opportunities for growth among each

company, the MEDC staff is able to help identify

what challenges may lie ahead and are able to

react to meet industry needs. Through the

implementation of the BRE Program, Workforce

Solutions, South Texas College, The University of

Texas Pan America and the MEDC staff are working

as a team to help our existing companies grow.

Janie Ramos

Vice President of U.S. Recruitment and Business Retention and Expansion

“Our economic prosperity thrives on

revenues generated by local businesses. As

a company grows, we understand they need

more than gratitude.

Our goal is to identify a company’s needs

and concerns and foster expansion

opportunities by tapping into potential local

resources which could increase the

company’s competitiveness and improve our

community’s quality of life.”

Ralph Garcia

Vice President of Business Recruitment for the McAllen Economic Development Corporation

“As an economic development

organization we have the

responsibility to attract new

investment and also take the

initiative to invest in our existing

business by providing them with

the necessary solutions and

support needed to help them

grow.”

Eric Canada

Economic development consultant, IL

Blane, Canada Ltd.

“Progressive communities are looking at the

existing business base as a portfolio. The

value of the portfolio is the sum total of the

value the individual companies bring to the

community. Similar to an investment portfolio,

the community’s portfolio provides future

security. But, insuring future security means

managing the portfolio…The goal of

community economic portfolio management

is to better manage public resources and

increase the return on investment in

economic development policy and programs

by maximizing the future economic value of

the business base.”

A COMPETITIVE ADVANTAGE

Business Retention & Expansion

An important next step foryour community