Business Retention & Expansion
The Best Kept Secret in Economic Development!
Welcome to the Business Retention and Expansion (BR&E) Program, a service provided to Arizona's communities by the Arizona Department of Commerce.
This program helps organizations responsible for retention and expansion develop a program to retain and encourage expansion of existing businesses. The program places significant emphasis on creating a business environment for stable, successful companies. It also provides resources to aid in the design and implementation of a locally defined and community-based BR&E program.
It is important to note that an organization may already be doing BR&E-related activities but calling them by another name. The organization may find the philosophies and activities promoted by the Arizona Department of Commerce will provide more focus and result-oriented planning for its efforts.
Why does a "successful" business need community support?
In short, because stable businesses play vital roles in their communities. Locally owned businesses usually have a long-term commitment to their community. They relate to their community"s lifestyle, and they have a vested interest in their community"s quality of life. They are there because they want to be.
Equally important, existing businesses are major contributors to the community"s economy and tax base. Cumulatively, they employ the greatest numbers and, as they grow and expand, they can generate up to 80 percent of their community"s new jobs. In economic development efforts, existing, successful business owners are precious resources. Their presence as community ambassadors also makes a very positive statement in new business recruitment.
Why should a community have a BR&E program?
Simply put, because everyone benefits -- when existing businesses thrive, so do their communities. And viable, healthy businesses are apt to remain in communities that demonstrate constant and visible commitment. Support of existing businesses also demonstrates support of job creation and additional community cash flow.
Why should your organization promote business retention and expansion?
Because existing businesses can relocate thus leaving a void in your community. They must not be taken for granted! The reasons a business may leave a community include lack of public services, political unrest, site limitations and lack of trained labor, just to name a few. Some reports indicate that another reason companies relocate is because the owner decides he/she would rather live somewhere else. In order to prevent some of the potential closures and/or relocations in a community, outreach to businesses may be necessary. However, when hard times hit a business community, and closures or failures occur, it is already too late to save some businesses. Take action early! For example, an organization representative should visit all new businesses, welcome them and develop a relationship. Let them know who to call for information on business assistance. This will send the positive message that the community cares about their future and well-being.
How will your organization and businesses benefit?
BR&E programs are low-risk, positive community outreach activities, typically administered by a local organization; the chamber of commerce or economic development organization, for example. As BR&E programs gain acceptance, the administering organization benefits doubly; first from providing a valuable community service and second from gaining recognition as a leader in its community"s economic enhancement. A retention program and its related activities DOES mean that the organization is interested in the continued well-being of existing businesses and the people who run them! It DOES NOT necessarily mean that anything is wrong in the community or with a specific business.
What is a business retention and expansion program?
It is a comprehensive program that can be as far-reaching as an organization is able to manage effectively or as conservative as one outreach activity. BR&E programs include planning and implementing community-specific activities that promote interaction with local businesses. Commerce"s Business Retention and Expansion program offers both one-on-one and group training to help organizations achieve their maximum degree of success. The activities of an aggressive BR&E program are limited only by the effort, imagination and resources of the community.
The key to any level of effort is to evaluate the options and plan for success. Establishing realistic, obtainable goals and objectives is crucial. Objectives may include increasing demand for the products or services of local companies; increasing a company"s profits through reduced operational costs; and/or expanding a company"s market with increased product information dissemination. How an organization tackles the objectives will be based on a full and complete understanding of the business community"s actual needs, not what it thinks they need.
Expansion of a firm in a community does not always equate to bricks and mortar, but often means an increase in employees, payroll, capital or an improvement in the bottom line. All of these will have a positive impact on the business atmosphere in the community. Establishing outreach activities to assist in the growth and promotion of existing companies will enhance the formula for business vitality.
What challenges will you face?
Retention programs are challenging to implement. Organizations should not get discouraged. As "one of the best kept secrets in economic development," the retention and expansion effort(s) may not get the same attention as recruiting a company to the community; however, the short-term and long-term effect will usually have a greater overall impact. The direct benefits of a BR&E program can eliminate potential lost jobs and the detrimental effect of the lost payroll from those jobs; retained businesses may have greater potential for expansion; and employees from retained companies are ideal candidates for start-up businesses in a community. And, to reiterate, business retention projects a positive, proactive image of the community for future business attraction.
Anticipation is crucial to retaining firms. Identifying problems and/or concerns at an early stage can determine whether a business succeeds or fails. A major component of anticipating a potential relocation or closure is having and updating a business inventory. A database of basic company information should include name, contact, address, phone, etc., as well as the most recent census data and other published information on a business. Survey and interview information belong in this file as does informal information heard or observed "on the streets." Because (theoretically) smaller communities have smaller business inventories, they can more easily rank priorities and target potential problems. Larger communities, on the other hand, will need to target the companies whose closing or relocating will have the greatest impact.
Developing a community profile, in other words, the business community"s service area, will also be of value to the effort. What are the strengths and weaknesses? What key issues impact businesses: services, regulations, infrastructure, restrictions? What are the issues that need or may need to be addressed before they develop into problems too large to overcome? This information will help identify business clusters that are most likely to expand or downsize.
Again, saving jobs does not necessarily get the same media attention as attracting new jobs and is more difficult to get buy-in from community officials, however, it must be a priority! Consensus on goals and objectives, effective use of business outreach activities suited for the community, and a commitment from the sponsoring organization are the most important issues an organization will face as it acts to produce results.
Community Outreach Activities
Proactive, innovative and result-oriented organizations will ultimately be leaders in the success of their communities economic enhancement.
The following are outreach activities for consideration:
- Advisory Ad Hoc Committee
- Awards and Recognition
- Breakfast with the Mayor
- Business Associations
- Business Advocate
- Business Impact Fact Sheet
- Business of the Month
- Business Visitations/Surveys
- Counseling
- Economic Outlook Session
- Financial Planning
- Mystery Shopper Program
- Presentations
- Procurement
- Public Relations
- Resource Publication
- Retail Leakage Study
- Reverse Business Trade Show
- Seminars - Management and Employee
- Shop Local Program
- Trade Show