All across economic development circles, Chamber executives and Economic Development executives focus on the strategies of Business Retention and Expansion and Business Recruitment. While MANY economic development executives believe that doing both is a necessary objective of any successful economic development plan, ALL agree that a very essential part of any growth strategy has to include, first and foremost, a plan to take care of existing businesses already in the region. It is widely argued that any successful sales driven organization realizes that it is easier to grow and retain an existing client/customer, than it is to go out and take one from another entity.
It has been approximated that 11% of a region’s growth consists of new businesses recruited to an area; 9% of the growth comes from brand new start-ups within a community; finally 80% of a region’s growth comes from existing business already in the area. Also reported is that 70% of a region’s job growth comes from the businesses already on the ground. Business Retention and Expansion (BRE) has been seen to be so successful that many cities throughout the U.S. have made retention and expansion an only and exclusive strategy. Littleton, Colorado has a retention program that has become the model and staple by which many communities have tailored their initiatives. Littleton has fully believed that their infrastructure has grown immensely by solely focusing on those that are already located there, and they believe that if their local businesses are successful, thriving entities, there are no better sales people for the region than their existing companies. Saint Joseph County Chamber President, Jeff Rea, has maintained that there is a 1 in every 1,000 chance on attraction relocation leads whereby a region has an opportunity to attract a big new business to their region. But, there is a 1 to 1 chance that you can help an existing business grow and develop in your own community.
The debate remains, where should an Economic Development organization spend their time, efforts or resources; attracting a new business with a 1 in 1,000 chance or an existing business with a 1 to 1 ratio and chance of helping that business to grow and expand? The ratios and R.O.I. (return on investment) seem like a simple formula; limited time, limited resources, limited funds, should equal, “I’m taking care of what I have in front of me and already on the ground in my city.” Business Retention and Expansion is less “Sexy”, less publicized, but it is the most essential part of growth. It is nearly impossible to effectively attract a new business to an area, if you are not properly working with existing businesses. BRE really is the offensive lineman you never hear of, or their name is never called, they are out there every play getting the job done, but you don’t ever see their name in the news the next day. They pave the way for the running back or quarterback to get the stats. And the press… your greatest sales people to attract new business opportunities to your area, should be businesses that you already have in your town. If a community makes it easy to do business in, then it is easier to recruit new opportunities.
Thus is also the role of a developer and of a local construction company. Local builders need to be engaged in a community ready to design, build, develop, and construct for the growth happening and going on in a community. While it is essential for construction companies to stand ready, be prepared and to play a role in helping to attract new opportunities and business to a community, their strength remains to be a major factor in helping to build and grow those businesses doing local expansion projects. Local expansion does account for at 80% of a region’s growth, then there is a crucial and vital role of a local contractor. That local trusted advisor and contractor is a very vital part of a community’s growth and prosperity. It is another tool that helps an area become “business friendly.” The ability to identify, work with, and partner with, a local construction company is a critical piece to every region’s growth. We, after all, are all in this together, and when one grows and expands, we all prosper.