The following appeared in the Lamesa Press Reporter, a bi-weekly news publication for Dawson County and the City of Lamesa. In order to improve communication with Lamesa constituents, achieve transparency of city tax fund management, and guide all messaging from/about our organization(s), I started writing an economic development column. It appears on the last Wednesday of every month.
Lamesa’s economic development corporations are pleased to announce that they are implementing a business retention and expansion (BR&E) visitation program. An official roll-out is expected in late 2016 (updated). The LEDC/LEAP Board of Directors and I want to personally and enthusiastically ask Lamesa’s business community to partner with us.
This is a huge undertaking. What in the world is it and why is important for Lamesa’s economic growth?
Let’s start with some background and context.
According to the International Economic Development Council, “business retention and fostering the expansion of existing businesses is the foundation of any sound economic development program.”
BR&E should be one of an economic development entity’s core functions for the following reasons:
Regardless of who they are or where they do it, all economic developers have three options for facilitating job creation and capital investment in a community: 1) attraction of external firms to the local market (a.k.a. business recruitment); 2) creation of new firms using various entrepreneurial development pathways; and 3) growth and expansion of existing companies (a.k.a. BR&E).
BRE Guru, a consultant firm, goes so far as to say “business retention and expansion is the underpinning for all other successful and sustainable economic development initiatives.” These consultants argue that BR&E is actually a prerequisite to any other development activity.
Essentially, a community’s economic development entity starts a BR&E program in order to provide a structured, action-oriented, and customer service approach to assisting its existing businesses.
The purpose of a BR&E visitation program is two-fold.
“First, the program serves as an early warning system to alert local officials to the plans, problems, and concerns of individual companies which could lead to the eventual relocation out of the jurisdiction or, as in case of at-risk companies, lead to layoffs or even closure,” says Kenneth Chapa on Quizlet.
“Second, the information resulting from the visits is aggregated and serves as part of a database for local ED groups and officials to stay apprised of the dynamics in their local economy, particularly the economic well-being of individual companies and various industry sectors.”
This data is then organized into an aggregate report. The report can highlight economic indicators pertaining to local companies, industry sectors, and/or geographic locations.
A BR&E program promotes local economic well-being by prioritizing initiatives to address business needs, helping the host community turn its vocalized support into actionable strategies that are business friendly.
When a community like Lamesa commits to working with its existing businesses, it commits to working with a sector that is not only important to the future of the local economy, but one that already has already invested significant resources into the community.
A successful BR&E program signals this positive message to businesses: Thank you for choosing Lamesa to start and grow your business. How can we help you be successful?
The importance of a BR&E program is also understood by examining what can happen in its absence. Without a mechanism for identifying business issues or addressing them, some firms unexpectedly relocate their operations or close their doors, often in frustration and defeat.
Relocation or closure of existing businesses result in the following: a) local jobs are eliminated; b) the local tax base is reduced; c) surrounding property values are lowered and the potential for blight is increased; d) the community’s image is lowered and its confidence is shaken; and e) additional closings occur as economic activity contracts.
But are existing businesses really contributing sources for economic growth and worth the effort?
Studies estimate that up to 80% of net new jobs and capital investment in any economy are generated by existing firms. Conservative estimates put that number at 40%. That’s right – the low estimate is a whopping 40%!
BRE Guru suggests that BR&E programs are especially successful in rural market areas where entrepreneurial and recruitment opportunities are limited.
Dear Lamesa Businesses, it is my hope that Lamesa’s upcoming BR&E visitation program will give us an opportunity to work together.
I will be contacting your business by mail with more information. Please feel free to contact me as well. My doors are always open.
Also – stay tuned to see our new website! And see you soon!
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