Building Your Community from Within

A NEW FOCUS ON BUSINESS RETENTION & EXPANSION

The Vision

Focusing on the needs and plans Focusing on the needs and plans of existing businesses in order to of existing businesses in order to grow new jobs locallygrow new jobs locally

Factors

• Loss of jobs during the recent economic recession

• Loss of jobs due to closure or relocation of manufacturing plants

• Fierce competition for large manufacturing plants

Statistics

Up to 80% of all new jobs in small towns come from existing business expansions 11%

80%

9%

Incoming New Business Existing Business ExpansionStart-up Operations

Source: “How to Market Your Community for Business Growth”

One small business (15 employees) in one year: • Generates $430,000 in payroll for the local community• Generates $45,000 in property taxes

• Makes charitable donations of $15,000 to local causes

Impact

$430,000

$45,000

$15,000

$490,000

A systematic approach to:

• Identify problems that could cause employers to leave

• Identify opportunities to help companies expand

• Build relationships with individual company executives to promote a sense of loyalty

Business Retention and Expansion

Objectives

• Demonstrate appreciation to existing firms

• Encourage expansion

• Solve business problems and retain companies

• Connect local businesses to resources

• Provide better information on strengths and weaknesses of business climate in community

Greater focus on an employer’s:

• Value to the community

• Growth potential

• Risk of leaving

• Satisfaction

Portfolio Management, What’s Different?

More than just the typical existing industry program.

The Portfolio

In the local community, the portfolio is made up of its employers.

How diversified is your portfolio?

Portfolio Example

Company

Name

# of Employee

s

Total Payroll Growth Rate of Industry

Capital Investment

Management

Acme Company

900 Decreasing Decreasing $0 in 10 years Non-local

ABC Company

300 Increasing Decreasing $0 in 5 years Recent change

XYZ Company

175 Increasing Increasing 5% of net profits annually

Local

A Portfolio Manager

• Must be qualified, compensated, given the time and resources, and be customer driven

• Diversifies risk by spreading the investment over a number of healthy companies

• Gathers and analyzes data regularly about

– Strategic direction of companies

– Trends in the industries

– Issues they face

• Prioritizes research based on percentage any one company represents within the portfolio

Business Advancement Team

A successful Business Advancement Team (BAT):

•Does not rely on only one paid professional

•Is not necessarily a group with degrees in statistics & business

•Is a group of committed individuals from the community

•Does have good leadership

•Does require some training

Team Members

The BAT should be made up of:

•ED/Chamber members

•Local business leaders

•City/County government representatives

•Utility representatives

•State agency representatives

5 Phases in Creating a Successful Program

• Organization

• Background information gathering & database creation

• Industry relations & direct information gathering

• Problem solving & opportunity identification

• Maintenance and public relations

Benefits

Typical Successful BR&E• Identifies plans of existing businesses

• Prepares community for change

• Improves quality of jobs available in community

• Saves spending budget on expensive incentives

• Attracts outside small businesses to the community

• Creates better communication with corporate citizens

Portfolio Management• Creates position of authority

for BAT• Capitalizes on the true value

of Retention & Expansion• Maximizes value of ED

resources• Creates a valuable

proprietary database• Gives decision-makers

valuable information• Builds the community from

within

“…as a nation we are not applying our American know-how to keep jobs here. The fact is that many manufacturing and high tech jobs are being lost unnecessarily.”

Source: Dr. Ronald R. Pollina, Pollina Corporate Real Estate, Inc.