Business Retention and Expansion - Existing Firms Create Up to 80% of New Jobs

The Best Kept Secret in Economic Development! Business Retention and Expansion (BR+E)
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. -- Excerpted from the Arizona Commerce Authority

A community consensus approach to encourage the growth of local businesses
Why Business Retention and Expansion?
A healthy and vibrant local economy depends on the well-being of a community’s existing firms.
Thus, efforts aimed at helping local businesses survive and grow in the local community are key to successful economic development. The community benefits because:
• Forty to eighty percent of all new jobs are created by existing firms
• Businesses that stay competitive are more likely to remain in the community and possibly expand
• Keeping an existing business is often easier than recruiting a new firm
• Firms considering moving will talk to existing firms. Odds are better of attracting new firms if existing ones are happy with the community.

Benefits of the Community Leader’s approach to BR+E
Economic development efforts often require action from many community players. Without community consensus, economic development stalls.The University of Minnesota Extension Service provides technical assistance, training and research to help communities assess business concerns, understand the structure of the local economy, set priorities, and implement projects that will help make communities more vibrant.

BRE Objectives
Short Term
• Demonstrate community support for local firms
• Help solve immediate business concerns

Long Term
• Build community capacity to sustain business growth and development through creation of a broad-based coalition
• Increase the competitiveness of local firms
• Establish and implement a strategic plan for economic development
-- Excerpted from the University of Minnesota Extension Service