Download - Lets Make Brevard A Great Business Community

Let’s Change Brevard IntoA Great Business Community!

Making Our Community Great

08/06/08

www.bestbusinesssummit.com 2

Is There a Problem?

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What Makes a Business Great?

• Strong, consistent revenue growth.• Strong profits.• High return on investment.• Mission accomplishment.• Dominance.• Good cash flow.

If I Could Grant You One Wish …

• More customers?• Richer customers?• Smarter customers?• Better location?• Bigger facility?• Better technology?• Better work ethic?• Smarter employees?

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What Makes a Business Community Great?

• Strong, consistent revenue growth.• Strong profits.• High return on investment.• Mission accomplishment.• Dominance.• Huge positive trade balance.

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If We Could Change One Thing …

• More customers?• Richer customers?• Smarter customers?• Better location?• More commercial space?• More technology companies?• Better work ethic?• Smarter employees?

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We have met the problem,

and it is us.

Cycle of Low Prosperity

• Problem: – Our customers aren’t rich.

• Why not? – Our customers are us & our employees.

• Huh?– Until our businesses prosper, we and

our employees can’t become the rich customers our businesses need in order to prosper.

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How do we break the cycle?

The Key: Where We Spend Our Money

• Objective:– Maximize the number of times our

money is re-spent here before it leaves Brevard.

• Strategy:– Buy from each other – i.e., buy local.– Help and promote each other.– Become great individual companies.

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Consumer Spending

• Average Brevard household take-home pay: $3,200/mo– Mortgage payment– Insurance – property, car, life, health– Property taxes, sales taxes, tolls– Car payments– Tuition, books, room & board

• Remainder to spend here: Peanuts

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Spending the Peanuts

• Where & how determines Brevard’s prosperity.– National vs. local businesses– National vs. local products

• Two keys to our prosperity– What share of each purchase leaves

town immediately?– How many times is a dollar re-spent here

before it leaves town?

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Key Concept: Local Premium

• More of our money stays here if we buy from local instead of national firms.

• How much more = Local Premium

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Key Concept: Local Premium

• Local companies plow more of their revenue back into the local economy.– Keep profits here– Use local banks, accountants, printers– Advertise in local papers & radio– Buy goods & materials locally– Employ more people per $1M sales– Pay higher local taxes– Give more to charities & community

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Chicago (Andersonville)

• For every $100 in consumer spending at a local firm, $68 remains in local economy.

• For every $100 in consumer spending with a chain firm, $43 remains in local economy.

• For every square foot occupied by a local firm, local economic impact is $179.

• For every square foot occupied by a chain firm, local economic impact is $105.

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Calculating Local Premium

• Example: Chicago (Andersonville)•

• All retail ($68 - $43) / $43 = 58%

• Restaurants = 27%

• Retail stores = 63%

• Services = 90%

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San Francisco

• Effects of redirecting 10% of retail purchase to local merchants:– 1,300 new jobs– $72,000,000 new payroll dollars– $192,000,000 new economic activity

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Other Buy-Local Campaigns

• San Francisco• Chicago• Boulder, CO• Vermont• Barnstable, MA• Austin, TX• Tucson, AZ

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Best Businesses for Brevard

• Group A– National firm; HQ here; creates here, sells

everywhere – e.g., Harris Corp; Authentec

• Group B– Local firm; creates here, sells everywhere – e.g.,

Ocean Potion; Symetrics

• Group C– Local firm; buys elsewhere, sells everywhere –

e.g., Pelican Sales

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Neutral Businesses for Brevard

• Group D– Local firm; creates here, sells here – e.g.,

Surfin’ Turtle Bar & Grill; Galaxy Grille

• Group E– Local firm; buys elsewhere, sells here – e.g.,

Melbourne Beach Hardware

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Worst Businesses for Brevard

• Group F– National firm; HQ elsewhere; buys everywhere,

sells here – e.g., Target; Starbucks; Home Depot; Outback.

• Group G– On-line or mail-order firm; buys elsewhere,

sells elsewhere – e.g., J.C. Whitney, Amazon.com.

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A Note on Taxes & Ownership

• Best Buy• Wal-Mart• Head First Consulting• City Tropics Bistro

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Best Buy (192 & Evans)

• Square feet: 99,767• 2006 assessed value: $494,960• 2006 tax levy: $9,093• Tax per sq. ft.: $0.09• Owner’s location: Greeley, CO• Corporate HQ Minneapolis

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Wal-Mart (A1A & Eau Gallie)

• Square feet: 92,041• 2006 assessed value: $4,650,000• 2006 tax levy: $93,775• Tax per sq. ft.: $1.02• Owner’s location: B’ville, AR

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My House (Melbourne Beach)

• Square feet: 2,821• 2006 assessed value: $493,730• 2006 tax levy: $8,311• Tax per sq. ft.: $2.95• Owner’s location: Right here!

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City Tropics Bistro (5th Ave.)

• Square feet: 6,181• 2006 assessed value: $948,140• 2006 tax levy: $18,782• Tax per sq. ft.: $3.04• Owner’s location: Indialantic

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Local Premium: 4 Comparisons

• Restaurants• Commercial supplies• Computer & network services• Small technology companies

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Local vs. National Restaurants

• Galaxy Grille & Surfin’ Turtle– 75% of revenue re-spent in Brevard

• Outback Steakhouses– ~45% of revenue re-spent in Brevard

• Local Premium = ~65%

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Commercial Supplies

• Pelican Sales– 95% of gross margin spent in Brevard

• Grainger– ~50% of gross margin spent in Brevard

• Local Premium = ~90%

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Computer & Network Service

• Data Doctors– 70% of revenue re-spent in Brevard

• Firedog & Geek Squad– ~50% of revenue re-spent in Brevard

• Local Premium =~40%

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Small Technology Firms

• Harris subcontracts $1M to small local IT-services firm– ~$800,000 is re-spent here.

• Harris subcontracts $1M to small IT-service firm in Boston– $10,000 is re-spent here (on travel).

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Rx

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Action at Four Levels

• Households & individuals

• Business owners

• Business community

• Government

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Households & Individual Consumers

• Change buying habits: Buy local !

• Encourage neighbors to do the same

• Pressure government to subsidize Groups A, B & C instead of Group F

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Individual Business Owners

• Recognize your stake in the success of every other Brevard business.

• Buy from each other.

• Refer business to each other.

• Market together.

• Make your business a great business.

• Compete on value & quality, not price.

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Business Community & Organizations

• Educate owners and residents.

• Launch a new joint organization to promote prosperity of everyone.

• Aggressively promote buy-from-each-other campaign.

• Lobby for government action to attract Groups A, B & C, instead of Group F

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Government & Quasi-government

• Recognize Brevard’s negative cash flow as a serious social & economic problem.

• Subsidize positive-flow companies, not negative-flow companies.

• Promote (and live) the buy-local principle.

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Our Missing Link

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Daddy Rabbit, … where are you?… who are you?… what are you waiting for?

Download - Lets Make Brevard A Great Business Community

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