Considerations for Successful Business Retention

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Considerations for Successful Business Retention
Expansion (BRE)

• Michael Darger,
• Area Program Leader Community Economics and
  Director, BRE Strategies Program
• University of Minnesota Extension Service

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Getting to Know You

• Ive parachuted into NAISTD
• How many here
• Are in Workforce Development?
• Involved in local economic development?
• Have participated in BRE or taken a BRE course?
• Have dean or vice president in title?
• Are wondering what this has to do with you?
• If nothing else at least its not a state of the
  state presentation.

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Objectives for this Session

• Identify the value of BRE to economic
  development
• Consider 3 conceptual approaches for BRE
  Visitation
• Review some recent community BREV initiatives
  that used the Community Leaders approach (aka
  Minnesota Model)
• Learn about BREV resources

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Definitions BRE vs. BREV

• BRE Business Retention and Expansion
• All economic development activities to keep
  existing businesses in the community and
  encourage them to expand (i.e. this is where an
  E.D. should spend most of their time)
• BREV Business Retention and Expansion
  Visitation
• Is a planning process for setting priorities for
  community sponsored BRE programs that best fit
  the needs of local business

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Why Are Existing BusinessesImportant to
Development?

• Engine for economic growth
• 40 to 80 percent of new jobs from existing firms
• Most new tax base and facilities investment made
  by existing business
• Peers talk to peers - unhappy existing businesses
  mean less success with attraction or incubation
  strategies
• If you ignore existing businesses youre missing
  a big part of the economic pie!!

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Changes in Jobs, Minnesota 4th Quarter, 2000 to
2001

• New jobs from expansions are over 2x jobs from
  start--ups
• However, State lost 1 of jobs in this period
• Source MN. Dept. of Employment and Econ.
  Devel., 6/2003

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Pair share to consider 3 possible BREV
approaches

• About 7 minutes in small group

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The Minnesota BRE Model

• U.M. researches, teaches and consults about the
  Community Leaders or Volunteer Visitation
  approach
• Its the approach we know
• Currently research social capital, success
  stories from any BRE, program evaluation
• But first, some info. on other educational
  resources for BRE

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Other BREV resources

• BREI conferences and its Basic BRE course, June
  4-6, 2007 in Regina, Saskatchewan,www.brei.org,
  sample surveys under its Resources link
• International Economic Development Council
  www.iedconline.org (October 11-12, 2006 in
  Halifax)
• Software providers www.executivepulse.com,
  www.blanecanada.com, www.surveygold.com ,etc.
• Your state/province E.D. association (EDAM in MN)
• Your states Cooperative Extension Service (e.g.
  Ohio Oklahoma have strong BRE resources)
• Others?

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Community Leaders BREV based on research

• Relies on sound local econ. devel. theory
• Reducing costs to the firms
• Making the firm more competitive
• Improving services and making local government
  more responsive
• Enhancing human capital
• Research base of peer-reviewed studies
• Some examples demonstrating success

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City of Faribault, 2002 (pop. 22,000)

• Used Community Leaders model
• Faribault Area Chamber was driver
• 91 businesses visited
• Five priority projects
• Promote Faribault as Place to Live and Work
• Improve Physical Appearance
• Create Incubator/Mentorship for Hispanic/Minority
  Entrepreneurs
• Define/Formalize Econ. Devel. Roles in Faribault
• Business community Weighs in on Comp. Plan for
  city
• Great accomplishments .BREI Award

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An excerpt from our Success Stories Research

• If you dont mind me reading a story to you.

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Swift Current, Saskatchewan 2002 (pop. 16,000)

• Worried about blowing away on the prairie
• Used C.L. model on steroids
• Visited 200 firms
• Adopted 10 strategic priorities In 3 years
  initiated 18 projects
• Results to date new regional hospital
  wastewater treatment facility, 17 biz bldg.
  projects, senior condos, and much more.
• Shameless self-promoters. See www.actionswiftcurr
  ent.com/Home.html
• 2004 BREI award and several other awards
• Saskatchewan is hosting BREI conf. in 2007

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Yakima County, Washington

• Yakima County Devel. Assoc. interview 100
  businesses every 18 months using Synchronist
• Modified C.L. approach? Spend lots of time on
  red flag responses
• Implemented Lean Manufacturing in 2002 to serve
  manufacturers as a whole (i.e. a systemic issue)
• Partners are Washington Manufacturing Extension,
  Workforce Devel. Council and YCDA
• 18 classes to date have provided 1 M of training
  for 60 biz and almost 500 employees

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Now for some details on C.L. BRE

• First we showed you some examples
• Now a tiny bit about the how to

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(No Transcript)
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A BRE Visitation Program is Good Community
Development

• Locally Based Program
• The community plans and organizes
• Volunteers visit firms
• The program builds linkages and networks
• People learn about local economy

• Follow-Up is Planned
• BRE Programs plan for something to happen
• The program responds to the needs identified in
  the survey
• Implementation of projects owned by community
  members

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Goals of a Community Leaders BRE Visitation
Program

• Demonstrate to local businesses that the
  community appreciates their contribution to the
  economy
• Help existing businesses solve problems
• Assist businesses in using programs aimed at
  helping them become more competitive
• Develop strategic plans for long-range BRE
  activities
• Build community capacity to sustain growth and
  development

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Early Warning of Plant Closures or Contractions

• Trends in employment and sales?
• Reasons for trends?
• Sufficient property for expansion?
• Considering moving or closing? (low odds they
  will tell - low cost of asking) If yes, why and
  where?
• Considering expanding? Impacts?

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Using Programs to Become Competitive

• Need to identify ways firms feel they could
  improve their competitiveness. For example, ask
  What type of information would the firm like?
  (labor training, financing, etc.)
• What public programs have firms used and would
  recommend to other firms? (EDA to SBA)

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Helping Firms Solve Local Problems (aka Red or
Yellow Flags)

• These problems include any items which are
  bottlenecks to the firms expansion or survival.
• Includes local and state government services,
  labor, or other issues.

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Strategic Planning Process

• This is a nutshell of a 3-month process
• Expert panel reviews raw data brainstorms
  project ideas. Outside analyst prepares research
  report
• Task Force reviews analyzed survey results and
  strategically arrayed project ideas
• Select potential projects to implement
• Finalize projects only if three people will work
  on implementation
• Hold implementation resources panel meeting
• Create summary report
• Hold community meeting

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BREV Interviewing Techniques

• If we have time we could view of bit of DVD
  segment
• or
• Discussion

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U.M. BREV Educational Resources Courses, Tools
or Consulting

• BREI Consultant Certification Course
• Online version of course, Oct. 2-Dec. 10, 2006
• Handout course brochure
• DVD on Visitation Techniques, 35
• Sample surveys available at brei.org or
  bre.umn.edu

• BRE Research Reports Course, Offered
  occasionally
• How to prepare the best reports to enable a
  community to take informed action
• U.M. BRE Strategies Program Consulting Services
  (for Minnesota communities)
• Sample reports

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Discussion
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For more information on U.M. BRE or our other
community economics resources

• University of Minnesota Extension website
  www.extension.umn.edu click Community
• BRE website www.bre.umn.edu
• Michael Darger, 612-625-6246 or darger_at_umn.edu