Business attraction programs round out your local economic development strategy by providing jobs and needed goods and services.
If your community needs or wants a particular type of business that it is lacking, check to see if the market has been inefficient in overlooking your neighborhood. Of course the truth could be that the business you crave has decided that your town or neighborhood does not meet its criteria.
When we talk about business attraction, some people are thinking specifically of retail attraction, which is why we provide a separate page for that. While implementing your economic development strategy, you may succeed in also meeting local demand for a popular product, which pleases your residents but does not make them wealthier.
But here we're focusing most on an economic base business activity that generates an export, meaning a net outflow of goods or services, from your community. In return, money flows in.
You will be most successful in business attraction when you target companies that will either fill a gap in meeting the needs of local residents, provide goods or services your existing businesses or industries need to purchase, or complement a growing or pronounced specialty that you have developed. Here when we speak of industry, we're simply speaking of an economic sector, not necessarily manufacturing. (It's quirky how we professionals know which meaning of industry we intend--either the broad economic sector, or on the other hand, specifically manufacturing.)
Let's say you have identified a service sector chain whose services are badly needed by your largest employer. You leaned about this, of course, when you made your periodic business retention visit to that employer.
There is one superior way to lure that service sector chain to your location. Rather than waiting for the business to find you, and rather than sending out a non-specific information packet featuring that attractive but general brochure for which you overpaid, go see them.
Talk to a real live person. Find out if you are being realistic or not. If they tell you their location requirements, and you think you can provide them, set up a step-by-step program of meeting their needs. Keep the company informed of how you’re doing. If it takes six months, fine. Just keep up the communication. It's really that simple. But it is so uncommon that your attentiveness really will be noticed.
We're sorry to disappoint you by saying there is no short-cut to attracting a desired business, but if you've ever engaged in courtship successfully, it's the same simple process that demands thoughtfulness, romance, and effort.
There's another useful analogy from everyday life. If you've ever been in sales, you know that sometimes you can't sell to your prospect. But if you get to know that prospect, they might refer you to a more likely buyer. Referrals can and do happen in business relocation or start-up as well.
Maybe we can talk you out of "business attraction" entirely. By now you know that we think entrepreneurship is the best possible economic development strategy.
When you support a locally owned business and help it improve and expand, you not only generate jobs but you also generate a return on investment that has a high likelihood of being spent to some extent within the community. This is why from a community development perspective, locally owned businesses generally are better for the community than chains.
Like all community development principles, there may be exceptions. For instance, in communities that depend on tourism for their outside dollars, a chain hotel, restaurant, or store may be more successful than a local operator due to superior ability to market nationally and undercut pricing through the power of volume discounts. So you need to use common sense in figuring out where a locally owned shop is likely to be successful.
In summary, when you are encouraging a new business to locate in your community, keep these points in mind:
• Be realistic in your business attraction program. Do your homework about the size and buying power of your market, and the market that is required to attract the business you want to reach. Concentrate on businesses that can successfully locate in your region of the country and in your size of community, and that are interrelated in some way with businesses already operating in your location.
• Approach business attraction through a campaign of thoughtfulness and attentiveness to needs. To be successful, you will need to perform better than the representative of the next community or neighborhood.
• The personal approach is best. Forget about fancy presentations, attending expensive conferences to learn how to do it, and pricey brochures. This is just about good interpersonal relationships and putting yourself in the other person's shoes.
• Growing your own business, whether through fostering entrepreneurship or helping your existing businesses expand, is actually superior to business attraction. So if you're coming up empty-handed when you try your best personalized approach, maybe you should focus on the education and creativity of your folks.
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