The Northeast Regional Center for Rural Development
The Pennsylvania State University
7 Armsby Building, University Park PA 16802-5602
814/863-4656(phone); 814/863-0586(fax)
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nercrd@psu.edu
BUSINESS RETENTION & EXPANSION VISITATION PROGRAM
IS IT FOR OUR COMMUNITY?
George Morse and Scott Loveridge
NERCRD Publication No. 72
CONTENTS
Is a BR&E Visitation
Program for You and Your Community?
Why are
Existing Businesses Important to Development?
What is
the BR&E Visitation Program?
What
are the BR&E Visitation Program Objectives and Process?
Local Roles in the BR&E Visitation Program
Overall Coordinator’s Role
Leadership Team’s Role
Task Force’s Role
Volunteer Visitors’ Role
Visited Firm Operator’s Role
Reasons
Volunteers Participate
How
the BR&E Visitation Program Benefits Volunteers and
Communities
What are the Costs of a BR&E Visitation Program?
Volunteer Time: Cost or Value?
How Long Does it Take?
How Many Hours are Required Per Person?
Cost of Doing the Applied Research
Fees Charged to Communities
Other Local Costs
What
Assistance is Provided by Universities, State Agencies, and
Others?
How
Can I Learn More About This Program Before I Decide?
Visit Other Towns
Speaker Phone
Contact a Certified BR&E Master Consultant
Appendix A:
Glossary of Terms in BR&E Visitation Programs
Research
Cited and End Notes
ABOUT
THESE MATERIALS
IS A BR&E VISITATION PROGRAM FOR YOU AND YOUR COMMUNITY? (1)
If you are interested in encouraging economic development in your community, this booklet is for you. Whether you are a professional economic developer, a chamber of commerce official or member, a local government official, an education official, or an interested citizen who wants to see your area become more economically resilient, you will be interested in this approach to economic development. It’s called the Business Retention and Expansion Visitation (BR&E Visitation) program.
This booklet will help you understand this local development strategy, its benefits and costs, and what you and others need to do to have a successful local program. This booklet will help you decide whether or not to adopt this strategy, and, if you do, how to do it. This booklet and the accompanying video can help you see the possibilities for your own community. The final results depend upon you and your community.
To help you decide if this approach fits your community, we cover the following questions:
- Why are existing businesses important in local economic development?
- What is the BR&E Visitation program?
- What are the BR&E Visitation objectives and process?
- What roles do local citizens and leaders play in the program?
- What are the benefits to a community and to the volunteers in program?
- What are the costs of the program?
- What assistance is provided by universities, state agencies, and others?
- How can you learn more about this program?
WHY ARE EXISTING BUSINESSES IMPORTANT TO DEVELOPMENT?
Existing firms are an engine of economic growth. Some studies estimate the percentage of new jobs created by existing firms as high as 80%, while the most conservative estimates say 40% (2). When a community commits to working with its existing firms, it commits to working with a group of firms that are important to the future of the local economy, and to those who have already invested in the community.
Many communities have pursued policies designed to attract outside firms to move into the area. However, such a strategy is not likely to be effective if existing businesses are not happy with the local business climate. Sometimes communities that are successful at attracting new firms do not see much growth. While new firms come in the front door, their existing firms downsize or exit through the back door. Increasingly, communities are recognizing that it makes sense to pay attention to the survival and growth of their existing firms.
WHAT IS THE BR&E VISITATION PROGRAM?
Business Retention and Expansion (often simply called BR&E) includes all efforts to encourage the survival and growth of a community’s existing businesses.
Examples of the hundreds of possibilities include:
- Providing technical training for new employees.
- Providing management seminars for employers.
- Helping firms identify local sources of input supplies and materials.
- Encouraging better labor/management relations.
- Reducing the cost and upgrading the quality of local government services.
- Establishing better school-workplace relations and fit.
- Retaining youth in the community.
All of these examples help firms to become more productive and thus more competitive. These ideas don’t try to hold the clock in place or to roll it back. Instead they help your local firms stay ahead of their competitors in other communities.
A BR&E Visitation program is a planning process for setting priorities for community sponsored Business Retention and Expansion programs that best fit the needs of local firms. A BR&E Visitation program recognizes that few communities can do everything that they would like to do to help their existing firms. Your community probably does not have the funds nor the leadership time to do it all. So—you have to decide what types of projects could do the most for your local firms. Your priority projects depend on the types of firms in your community, the competitive pressures they are facing, the nature of your local public services, the qualities of your labor force, and many other factors.
WHAT ARE THE BR&E VISITATION PROGRAM OBJECTIVES AND PROCESS?
Most local BR&E Visitation programs have the following objectives and visitation process:
- Demonstrate to local businesses that the community appreciates their contribution to the local economy.
- Help existing businesses solve problems.
- Assist businesses in using programs aimed at helping them become more competitive.
- Develop strategic plans for long-range business retention and expansion activities.
- Build community capacity to sustain growth and development.
Typically, there are four stages to the BR&E Visitation Process:
Stage 1: Firm Visits |
Stage 2: Immediate Follow-up |
Stage 3: Data Analysis and Recommendations |
Stage 4: Commencement Meeting & Implementation |
Figure 1: Flow diagram of the four typical stages in the BR&E Visitation Process.
|
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VIDEO SEGMENT |
If you would like a quick illustration of the steps in the BR&E Visitation process, view segment 1 of the video that accompanies this set of booklets. That segment follows Sibley County, Minnesota, through the steps listed above. |
LOCAL ROLES IN THE BR&E VISITATION PROGRAM
As with any successful program, someone has to be the spark plug for it. The spark plug for the BR&E Visitation programs is the Overall Coordinator (or Chair of the Leadership Team). His/her formal duties include convening the Leadership Team and serving as meeting chair.
Three or four other local citizens need to share the leadership role with the Overall Coordinator: Media Coordinator, Visitation Coordinator, Business Resources Coordinator, and Milestone Meeting Coordinator.
The Media Coordinator helps to coordinate media coverage.
The Visitation Coordinator helps organize the Task Force and Visitation Teams to prepare for the firm visits.
The Business Resources Coordinator helps organize the Team to respond to the firms’ urgent and immediate concerns (3).
The Milestone Meeting Coordinator helps organize the Task Force retreat, the business resources meeting, and the community commencement meeting.
All members of the Leadership Team participate in all stages, with each Coordinator serving as the quarterback at different stages of the program. The publication Local Leadership Team Manual gives more details on the roles and responsibilities of the Leadership Team and the Overall Coordinator.
The BR&E Visitation Task Force’s main responsibilities are to:
- Set the overall policies for the program (e.g., number of firms to visit, types of industries to include, number of visits/team, etc.).
- Recruit sufficient volunteers to conduct program (each Task Force member usually recruits one or two Volunteer Visitors).
- Assist in securing written endorsements from local organizations.
- Attend the firm visit orientation and visit at least two to four firms each.
- Participate in two meetings to handle the immediate concerns of local firms and to assist in the follow-up work.
- Review the research results and set priorities for long-term projects for BR&E (done in a four-hour mini-retreat).
- Assist in planning the community commencement meeting.
- Assist, as appropriate, in the implementation of the projects.
- Attend quarterly progress reporting sessions for a year after adopting the priority projects.
Each Task Force member will need to contribute about twenty hours prior to the community commencement meeting. This is spread over several months for less than one hour per week. Naturally, some Task Force members will spend more time because they become very involved in helping businesses with immediate concerns, but typically, this involvement is part of their "day-job" responsibilities. Each Task Force member’s specific responsibilities for ongoing implementation are arranged after the projects are identified.
Diversity of Task Force Membership
As illustrated, your BR&E Visitation Task Force should consist of five different groups of community leaders: (1) Business Leaders, (2) Development Professionals, (3) Local Government Officials, (4) Education Officials, and (5) other key Community Leaders. Your Task Force needs this diversity because each of these leader categories can contribute to the solution of local business development problems. For example, business owners can help the Task Force better understand the problems expressed in the surveys. School officials have been able to help start school/business partnerships and to reform educational programs to address business needs. Local elected officials need to learn about concerns with public services. And professional developers often have information on state and federal programs that are needed by firms. A recent research project has shown that groups that have a broad-based Task Force are more likely to implement their priority projects than those that don’t (4).
If you live in a sparsely populated area, you may feel that you can’t get everyone from all five groups. Experience has shown that almost every community can find someone in each of these roles. They may not live in your community, but their territory includes your community. Invite them!
Eligibility for Task Force
What skills do you need to be an effective Task Force member? Task Force members need to be recognized community leaders because an influential group is needed at various times during the process:
- When you need to handle the immediate concerns of the firms.
- When projects are selected.
- When projects are presented to the public.
Beyond being a recognized community leader, Task Force members who possess a basic understanding of the local economy and work easily with others will be effective.
| Whom Should We Invite to be on the Task Force? |
Business Leaders:
Development Professionals:
Local Government Officials:
Education Officials:
Other Community Leaders:
|
Volunteer Visitors must attend a two-hour orientation. During orientation, the Leadership Team will help the volunteers identify their Visitation Team member and learn how to interview firm managers or owners. They also will be assigned the (two to four) firms they will visit. This requires between six to eight hours of total time. These visits are usually done within a two- to four-week period.
In previous programs, Volunteer Visitors have represented a cross-section of professions and organizations. In addition to business persons and economic development professionals—ministers, plumbers, and school superintendents have been Volunteer Visitors. Despite this variety, all volunteers should be enthusiastic about the program, influential in the community, and must understand the confidentiality of the information they will be gathering.
Local influential leaders who are active in the community are usually the best volunteers because they recognize the importance of helping to improve the community’s economy and well-being.
Volunteer Visitors should include people from both the public and private sectors. Volunteers such as chamber of commerce executives are important to the program because they have the resources, contacts, and leverage to address many of the concerns that industry reveals during the visits. And when your roster of volunteers also includes business owners and executives from the private sector, the program is more legitimate from industry’s point of view. The program is perceived as more of a community effort rather than a "chamber," "council," or "city" effort; in some communities, these labels could damage the credibility of the program.
Typically between thirty and one hundred firms are visited. Generally, Volunteer Visitors are instructed to interview the firm owner or operator, but if this person will be unavailable for a long period of time, then volunteers are instructed to interview the highest management official possible.
REASONS VOLUNTEERS PARTICIPATE
Many volunteers participate because they care about the economic development of their community. Some volunteers (public officials, extension agents, development department representatives) participate because the program is essentially an extension of their current job. Some volunteers participate because they want to learn more about local industry, while others (new residents) participate because they want to learn more about their community in general. Still others (public officials, new residents, business owners and mangers) participate because they want to meet new people and develop more personal and professional relationships, while others (retirees, housewives) participate because they want to become more active in their community. And still others participate because of peer pressure. These are just some of the reasons that volunteers have been motivated to participate in previous programs.
HOW THE BR&E VISITATION PROGRAM BENEFITS VOLUNTEERS AND COMMUNITIES
Citizens and local leaders who have worked with the BR&E Visitation program cite the following reasons why they have been active participants:(5)
- BR&E Visits are fun
We guarantee you will have fun! Everybody says, "This is fun" after completing their first firm visit. You’ll enjoy socializing with other key community leaders and participating in important community decisions.
- BR&E Visitation
Program builds networks
You can build networks with other local businesses and leaders, and with regional and state economic development professionals. These contacts can often help your business or future development efforts.
- BR&E Visitation
Program is a learning experience
You will learn about your local economy’s strengths and weaknesses from the perspective of local businesses and gain insights on how your community is likely to develop in the future. You will learn about new options for working with existing firms and ways you can shape your community’s destiny.
- BR&E Visitation
Program brings the community together
In many communities, citizens and local leaders are thinking about their future, but they’re not working together to have an impact on the future. The BR&E Visitation program can bring your community together. Business persons, local government officials, education officials, professional developers and interested citizens all work together for the benefit of existing local businesses and their community.
- BR&E Visitation
Program is do-able, and it gets results
Citizens just like you and your neighbors have done this program in all sizes and types of communities. Excellent BR&E Visitation programs have been completed in rural, suburban, and urban areas and are getting results. Naturally, it’s more rewarding to work on projects that are both feasible and achieve results.
- BR&E Visitation
Program demonstrates that "we care about
business"
Just visiting firms demonstrates that your community cares about its local businesses and appreciates their economic contributions to the area. It’s surprising how many business leaders feel unappreciated and have not been personally told that the community values them.
- BR&E Visitation
Program is low risk, but only if done correctly
If you follow the guidelines in these manuals, the BR&E Visitation program is safe. As a local leader said, "How can you possibly lose?"(6)
- Improved Public Relations
with Existing Firms
Most BR&E Visitation programs send two community leaders to visit each firm; this results in improved public relations with them. Research has shown that demonstrating a pro-business attitude was rated as one of the greatest benefits of the program (7). Many firm owners have said: "This is the first time anyone has come to visit us and really listen to our opinion."
- Help Firms Solve Problems
Often firms have concerns that require immediate attention. The BR&E Visitation approach outlined in these booklets is an effective means of quickly addressing many of these concerns. For example, the Portage County, Ohio, BR&E Visitation program provided business incentive information to twenty-two of the sixty-nine firms visited in 1994. Four of these firms are planning investments of over $20 million and the addition of 117 jobs. In St. Paul, Minnesota, a firm owner mentioned during a BR&E visit that the firm might be forced to close due to a fire code problem. The BR&E Visitation program contacted the St. Paul Port Authority who worked with the firm and the fire department to develop a solution, saving 124 jobs. In reviewing the survey results, Task Force members in Harrisville, West Virginia, learned that local firms were losing business and missing shipments because the road into town was poorly marked. The Task Force worked with state government to correct the problem.
- Help Firms Become More
Competitive
Profits are essential for the retention and expansion of firms. For a firm to survive, it must make a profit—at least over the long run. If your local firms can make more profit in your community than in others, you won’t have any trouble retaining them. Since profits increase with higher prices per unit and lower costs per unit, other things being equal, BR&E programs that help firms reduce costs or increase values add to the firms’ competitiveness. For example, when the Becker Otter Tail Dairy BR&E project in Minnesota found financing was a bottleneck for expansion of many local dairy farmers, the Task Force set up a dairy financing conference, which attracted ninety local bankers. Already, over $3 million in new dairy facilities are in development. In Taylor County, West Virginia, the local BR&E Visitation Task Force found that workers lacked math skills, so they worked to establish a business and education partnership. This resulted in the development of a new program, which provides math training to workers. To give incentives to workers, a local greenhouse gave raises to workers who completed the math program. With their new math skills, workers make fewer mistakes when they mix chemicals, which saves the company money, and underscores concern for environmental issues.
- Develop Action-Based
Strategic Plans for BR&E Visitation
Few communities can tackle all of the BR&E projects that could benefit local firms. The BR&E Visitation process outlined here helps the Task Force use the data to reach a consensus on high priority projects. A recent study found that one hundred percent of the most successful BR&E Visitation programs had written action-based strategic plans (8). For example, the Anaconda, Montana, BR&E Visitation program developed an action-based strategic plan, which resulted in the following projects:
- The development of a Jack Nicklaus golf course where an ugly hazardous waste site had been located at the entrance to the community.
- The retention of a state hospital, saving five hundred jobs.
- The development of business start-up educational programs that resulted in forming eleven new businesses and expanding seventeen home-based businesses (9).
- Build Community Capacity
for BR&E
The most important long-term benefit of this action-based approach to BR&E Visitation is that it builds the capacity of the community to do BR&E. Four important aspects of this improved capacity are:
- Stronger collaboration between local development agencies, local governments, citizens, educators, and local businesses.
- A better understanding by local leaders of the strengths and weaknesses of their community’s local business climate.
- Better communication among businesses and leaders.
- Better linkages to state and federal development assistance.
A study of an Ohio BR&E Visitation program found stronger collaboration among a wide variety of local leaders—due largely to the process used by the Task Force to deal with immediate individual concerns (10) (for more information see The Local Leadership Team Manual p. 9). If you want to attract new firms, you must understand your community’s strengths and weaknesses—from the perspective of the business world. No group is in a better position to tell you what these are than your existing firms. Prospective firms considering your area as a location will send a team to visit them.
You will have more success in attracting new firms if you talk with your local firms first and understand your community’s strengths and weaknesses. For example, Fayette County, Ohio, had a long-standing reputation as having a poor labor climate as a result of strikes over twenty years earlier. However, the BR&E Visitation survey found that labor/management relations at the time of the survey were very good. The local Task Force used this information to successfully market their community to several new industrial prospects (11). Although very few economic development programs focusing on industrial attraction operate on a countywide basis, most BR&E Visitation programs do. This enables communities of varying sizes to pool their resources to help their existing firms compete.
