Building Your Community
from Within
A NEW FOCUS ON BUSINESS RETENTION &
EXPANSION
The Vision
Focusing on the needs and
plans of existing businesses
in order to grow 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
9%
existing business
expansions
11%
80%
Incoming New Business
Start-up Operations
Existing Business Expansion
Source: “How to Market Your Community for Business Growth”
Impact
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
$430,000
$45,000
$15,000
$490,000
Business Retention and
Expansion
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
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
Portfolio Management, What’s
Different?
Greater focus on an employer’s:
• Value to the community
• Growth potential
• Risk of leaving
• Satisfaction
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
Local
profits annually
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
•
•
•
•
•
•
Portfolio Management
•
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
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.