One in ten Americans are actively involved in entrepreneurship (either owning their own business or actively pursuing starting one) and between 600,000 and 800,000 new businesses are started each year. 

There is no question that these small businesses are an important part of the national economy and they deserve the attention of economic development professionals.  Last week, economic development professionals in the Northeast were fortunate to have the International Economic Development Council (IEDC) professional development training program return to New York State with a curriculum dedicated to this topic. In partnership with the Northeastern Economic Developers Association (NEDA) and Camoin Associates, IEDC hosted their Entrepreneurial and Small Business Development Strategies course in Albany, NY. The training program focused on issues related to how economic development professionals can support small businesses and entrepreneurs.

The training program included a session on a technique called economic gardening, which is defined as supporting and cultivating economic growth among existing companies to encourage local job and wealth creation.  Rather than economic development professionals investing their time and resources into that one “big get” of a new 500 person manufacturer, economic gardening focuses on assisting entrepreneurs and small businesses to succeed and expand within the community.  Economic development organizations can provide information, market analysis, infrastructure, connections and much more to help the businesses in areas where they do not have internal capacity, time or skill. Examples of successful economic gardening can be seen in Littleton, Colorado and Beaverton, Oregon. These communities provide services such as financing, assistance with city procedures, GIS database research, connections to other resources and access to demographic databases. Most of the economic gardening work is occurring in the western United States at this time, but it is becoming a more relevant economic development tool throughout the country.   

Last week’s training program attracted people from all over the United States, including individuals from California, Montana, North Carolina, Washington, Georgia and Iowa. It was great to have the opportunity to talk to others and see the similarities and differences in the issues that many of us are facing throughout the country.  The program was well received by all I spoke with and I know I left feeling inspired and ready to take the new skills back to the municipalities I work with. 

Camoin Associates, NEDA and IEDC will be hosting a second training on May 17^th and 18^th that will focus on Economic Development Strategic Planning.  If you are interested in learning more or registering, click here:   http://www.iedconline.org/?p=Training_Planning_NY

I always find it refreshing to get out of the office every once and a while to attend a training class, meet up with other economic development professionals and take a break from the routine of everyday. Last month I was fortunate enough to attend a training hosted by the Northeastern Economic Development Association (NEDA) on the topic of business credit analysis and real estate financing. While the topic may sound rather dull, the presenter from the National Development Council (NDC) did an excellent job and made it quite interesting.

In addition to the slide show presentation and information from the instructor, the open-discussion style format of the training allowed the participants to offer stories about what it has been like for them to manage loan programs in their communities and what challenges they have come up against when reviewing business credit.  It was interesting to hear the economic developers in the room talk about the struggles they face when trying to loan out public money in a conservative way (to ensure payback), while also using the money to act as the “gap-filler” for businesses who otherwise would not be able to get traditional financing. I can relate to their stories. In some of the loan programs I have administered it has been hard to find a balance between trying to support local economic development through loans to riskier businesses while at the same time protecting the public’s trust in the organization’s money management decisions.  We discussed at the training how one of the most important things that need to be done when establishing a loan program is to determine what the role is and how willing to take risks the stakeholders are. For example, is the loan program’s role to take risks on businesses that otherwise would never get a traditional loan, or is it to partner with traditional banks to expand access to capital?  One type of program is not better or more important than the other, but expectations of risk should be clearly established before any loans are made. 

The real estate development financing aspect of the training was also very interesting and NDC offered us the chance to take a case study and figure out how to make the financing work. We were able to make changes to the required interest rate and terms and required cash on cash returns of the investors to make the deal go through. It was helpful to see all the different players in the game and all the different ways people need to compromise in order to make the project work.  When all was said and done, the three groups at the training had all solved the problem in a completely different way while still making the project successful.

Finally, as someone who knows her way around Microsoft Excel’s formulas pretty well I had never taken the time to actually learn the background calculations and this class offered that information (all good information, but it is unlikely you will catch me doing the long hand work anytime soon).

On October 29^th, 2011, a new store opened in a small town in upstate New York but it was unlike anything the State had seen before; with over 600 investors The Saranac Community Store is a community owned department store serving residents and visitors.  The New York Times published an article about the Community Store on November 12^th, 2011, that reports on the opening of the store in Saranac Lake (a town in the Adirondacks with a population of approximately 5,000) and also provides a bit of background on this retail model and examples of residents taking charge of economic development in their own backyard.

The idea for the Saranac Community Store was borne out of necessity.  In 2002 the local department store closed and the residents no longer had easy access to consumer goods for daily life such as clothes, home goods and bed linens.  Year round residents living in Saranac Lake were then forced to travel 50 miles to Plattsburgh for these items.  This was deemed unsustainable and unacceptable so a group of residents started looking into retail alternatives, primarily alternatives to big-box stores.  When the group learned about the community store model, they knew they were on to something.   It took over five years to secure enough funding to start the Community Store, but last month the 4,000 square foot space located across from the Hotel Saranac was completed and stocked with inventory from clothing to baby strollers and hardware to comforters. The NYT article reports that the first day of sales totaled $7,000.

Community stores are popular in Britain and there are examples in rural parts of the western United States, but there are no others like it in the northeast.  In 2006, after residents of Saranac Lake identified the community store as a retail model with potential, they invited a representative from Powell, Wyoming, to come and talk about their community store, which opened in 2002 and is known as the Merc.  The Merc was started after the main department store in town shut down and residents were worried about the impact on other stores in the area so they sold shares and opened a community department store, which now brings in $600,000 in sales each year. Shareholders of the Merc even receive annual dividends from the store’s profits.  The 2006 presentation by the representative from Merc was attended by 200 people.  Afterwards residents of Saranac Lake were even more focused on pursuing the community store plan by developing a business plan, initiating funding, navigating the legal process and establishing a board of directors. 

While the Saranac Community Store is still getting its footing, it is an important and interesting example of communities indentifying a need and figuring out a way to respond to it without accepting their fate or waiting for someone to save them.  Thinking outside of the box has helped Powell, Wyoming, change their fate, and residents and visitors of Saranac Lake, New York, are optimistic as well.

Sources:

Cortese, A.  (2011, November 13). A Town Creates Its Own Department Store. The New York Times.

The Community Store in Saranac Lake. http://www.community-store.org/. Accessed November 13,

                2011.

Continuing with the ED Navigator’s series on business incubators, this article outlines the importance of performing a “routine checkup” on the businesses in the incubator and a checkup of your relationship, as the incubator manager or Economic Development Official, with the larger business community.

Routine checkups conducted on an annual or semiannual basis will allow your organization to remain effective and efficient.  Depending on the size of the incubator, the medium/tool for this dialogue varies and can include annual surveying, quarterly check-ins and/or other means of communication. 

Most importantly, the dialogue that ensues between you and the businesses during the checkup will ensure that you are well aware of the current needs or issues that businesses are facing and can step in with additional assistance as necessary. Routine checkups can help you identify, for example, if a business is having a particularly tough time establishing credit or identifying customers. Being aware of these types of problems early may allow you to make a contact or step in on their behalf before these issues become more serious. 

Talking with the businesses will allow you to identify which services are working and which may need to be altered to better serve the businesses. You might ask them about changes in the layout of the building, in the health care offerings, or in the business planning assistance program that would be valuable.  This open communication will allow the business owners to voice their needs or concerns in a way that can be easily documented and addressed.  Being able to better meet the needs of the businesses as a result of this dialog will make the organization/incubator more effective.

In addition to being able to identify problems at their onset and evaluate business services, maintaining data and information on businesses will make it easier to demonstrate the incubator’s worth to the public if it should ever come into question.  For example, if your incubator receives any public subsidies that may be eliminated in the future, the ability to point to specific growth, jobs, or investment will likely make the threat less imminent by illustrating the impact that your organization has had on the local economy. This type of benchmarking and annual data gathering has proven to be helpful for a variety of economic development organizations that have to fight each year to prove their worth and impact to the public.

Finally, it is also important to conduct regular checkups of your relationship with the local and regional business community. Benchmarking and annual review of the organization will make it possible to identify what types of businesses in the community may be underserved and where there may be potential for partnerships or collaboration.  Staying in contact with existing businesses and understanding their product and service will make you better able to work on their behalf in finding new relationships that will further businesses in the incubator and within the community.

You take your family in for their annual checkup each year at the doctor; make sure you are doing the same for your economic development organization.

Whether looking to develop their industrial base, attract new tourists or encourage downtown revitalization, one of the most important components of an economic development strategy is the establishment of a “brand”.  As more and more communities fight for limited dollars, creating a positive and recognizable brand has become much more important. The brand should invoke positive thoughts that clearly and concisely describe the unique characteristics of the community and why, among all the other choices, this place is a desirable destination.

There are many ways to go about developing a brand that expresses the unique characteristics of a community that will appeal to tourists, residents and new business alike.  Some of the ways that communities can develop a brand include requesting public input, hiring a consulting firm, and building off of existing branding material. The following tips provide helpful hints on how to make your brand successful.

Be Unique: Identify the aspects of your community which are unique and express those characteristics through the brand. Many communities have nice downtowns and friendly people, but maybe your community has an interesting old myth associated with it or some historical significance that others would find interesting.  Use this information to attract others to your community.

Remember to implement: With all the time, effort and money that it can take to develop a community brand, all local officials and economic development organizations should be focused on implementing the brand to make it successful. The comprehensive implementation plan for the brand should include using it on all community documents, local print advertisements and used as much as financially feasible.  The implementation plan should include creative ways to get the message across. For example, paint your brand on the sidewalks, on the side of the bus stop and have local merchants hang up the same window decal.  Create and distribute slick, intuitive and informative brochures and copy the format on the community website.  Create car decals to make your brand mobile.  Finally, install placards, street flags etc.

Assets; use em’: Identify the assets in your community that will be attractive to potential consumers and build off of them rather than trying to build something completely new. For example, in the Town of Lloyd New York, Camoin Associates encouraged them to build off of their vast recreational resources as part of their brand. The Town of Lloyd is adjacent to the Walkway Over the Hudson pedestrian bridge as well as the Hudson Valley Rail Trail, making them attractive to bike riders and recreation tourists.

Not too many words:  Language used for the branding material should be clear and concise. Part of the success of your brand is creating an easily memorable and succinct image for your place. 

Design oriented: The brand should not only be words/phrases but should be design oriented and clean.  This will allow the brand to be used on a wide variety of promotional material including brochures, online and local letterhead. This will be useful in getting the brand out and making it recognizable to local and regional consumers.