Economic Gardening Strategies

In these tough economic times when communities are struggling to retain existing businesses and to prevent more storefronts from closing up, attracting new businesses that will create new job opportunities is extremely challenging. Many communities are working hard to overcome these ills by creating an environment that fosters entrepreneurship. Research has shown that small businesses are the leading job creators in this slow recovery. 

In his article titled “Fostering entrepreneurialism: Making economic gardening work downtown,” Chuck Eckenstahler lists seven things to consider when developing an “economic gardening strategy.”

1.       Help surmount the hurdles – Provide assistance with navigating through and completing legal and regulatory requirements of establishing or expanding new businesses.

2.      Host entrepreneurial cafes – For many new entrepreneurs, traditional physical space is not as important as it once was. Providing a ‘space’ (bricks and mortar or cyber) where entrepreneurs can network and share ideas, if applicable to the locality, should be part of the strategy.

3.       Carve out opportunities within the economic landscape – It is important for both the entrepreneur, as well as the host community, to identify the existing supply and unmet demand of retail goods and services. This typically lies on the shoulder of the entrepreneur, however, Eckenstahler and many economic development practitioners would argue that to ensure successes, this should be a shared responsibility.

4.       Raise capital to create a Shark Tank – Many businesses fail due to lack of capital. “Community economic development strategies may require assembling social venture capitalists,” or other creative financing mechanisms like crowdfunding.

5.       Support population diversity – “Create support programs that celebrate population diversity and embrace groups that have a high propensity to form new businesses.”

6.       Create a “Match-up” marketplace – Create opportunities to match the “entrepreneurs’ needs with available support capacities.”

7.       Celebrate success – Create a media campaign that regularly highlights new business formations and promotes the locality/region as one that supports new business startups.

“Adding some or all of these suggestions to your economic gardening strategy will enrich the soil for planting the seeds of new business.”

Gentlemen of the Road stopover in Bristol

Bristol, TN/VA is a unique place.  “Two States; One State of Mind” is their motto, but navigating two sets of  building regulations, garbage pickups, tax codes and general government type operations can get a bit confusing.

Famous Bristol Sign Across State Street

However, Christina Blevins, executive director of Believe in Bristol, Bristol’s Main Street organization, bridges the gaps everyday in a positive, energetic and infectious manner.

Her coalition’s building skills recently paid off when Mumford & Sons were looking at communities  in which to hold their traveling Gentlemen of the Road music festival.

Already known worldwide for the Rhythm & Roots Reunion and as the Birthplace of Country Music, Bristol had an inate attraction for the band.  However, the ability to coordinate the many moving parts that an all day outdoor festival requires, in addition to the evenings music selections across the street (and consequently across the state line), Bristol cinched the deal.

Already, Bristol is getting tons of press about this event, but the real lesson is to be prepared when opportunity knocks.  Keep building relationships, offer value to all of your partners, understand the needs of your stakeholders, offer assistance without reservation and become indespensible.

Read more about the festival here, here, here, here and here.  Discounted tickets are on sale June 1.

Entrepreneurs. Better with age?

Entrepreneurs are the lifeblood of the economy. They’re innovators, experimenters and risk takers, the driving force behind capitalism’s “perennial gale of creative destruction,” in economist Joseph Schumpeter’s evocative metaphor.

So says Chris Farrell in this week’s Bloomberg Businessweek.

But Mr. Farrell goes on to remind us that entrepreneurs are not only young, brash, rule breakers.  They also include older, more seasoned innovators.  Fully 20.9% of all new entrepreneurial ventures are started by people 55-64 years old.

These entrepreneurs may be forming enterprises because they finally have the security to follow their dream, or maybe they were laid off and found finding a new, challenging job toward the end of their career arc to be difficult.  Others may be looking for a little more control of their work-life balance as they make a 20- or 30-year transition to retirement.

Regardless of their reasons, there businesses may be well suited to the scale of your downtown.

Well-wired Winchester is as close to Dulles Airport, in terms of travel time, as downtown D.C. and is better hooked into the Ashburn “home” of the Internet than almost any place in the world.  A transitioning entrepreneur might find the housing, rent and tax rates beneficial, while cherishing the more relaxed lifestyle that a pedestrian-oriented comercial district, closely abutted by historic residential neighborhoods, can provide.

USAToday printed a similar article last month, and Slate published one as far back as 2010, detailing reasons why older entrepreneurs may be more successful, not the least of which is access to capital.

Farrell, too, gives several reasons that older entrepreneurs may have a leg up on their younger competition, but a successful community could use both.  Making sure you are providing the necessary tools and amenities for all entrepreneurs is vital.

Resources for Small Business Financing

The Federal Reserve Bank of Richmond (FRB) recently posted an issue of Marketwise Community, a web publication which highlights community development best practices  and emerging issues that impact communities in the southeastern United States.  The current issue, New Alternatives in Small Business Financing, addresses small business lending in the wake of the recession.  The message – banks started to loosen some lending standards in mid-2010, a year after the recession ended, but loans remain hard to get by historic standards.  The good news is that there are some loan products available to businesses in need of working capital.

The Small Business Administration (SBA), a federal agency mandated to increase small business access to credit, refers to three types of nontraditional lending partners along with the examples of the credit products they offer to small businesses.  Loans range from $5,000 to $35,000 and can be used to pay short-term debt obligations, free up cash flow to purchase inventory, or provide capital for start-ups. 

Small businesses need to be the ones to determine what alternative business sources best match their financial state and funding needs, but Main Street programs can play a critical role to help direct the business owners to the available resources by highlighting them through an e-blast, blog, or an office binder.  Consider including the information from this SBA article: Five Critical Steps to Securing Small Business Capital.  

As effective partners, both the FRB and SBA provide support systems and tools. You can play a big part in connecting your businesses to these available resources to ensure  that your district is performing to its full economic potential.

 

Guest Blogger: Jennifer Heyns on Warrenton’s Emerging Latitudes

When people shop locally, they know they are helping to support their community and the shop owners who live there. At Warrenton’s Latitudes Fair Trade, shoppers know they are supporting not only a local business, but also artisans from developing countries around the world.

Latitudes buys handcrafted items from overseas either directly or through a wholesale distributer, ensuring that much of the profit reaches the hands of the original creator. Each item it sells is unique, with deep cultural ties to its country of origin. It not only sells jewelry, scarves, and bags, but also practical household items such as baskets, vases, and table linens.

Latitudes owner Lee Owsley is proud to support artists in less-fortunate countries. Her business allows both buyers and sellers to feel good, she says, because “instead of improving their lives and the lives of their children via handouts or illegal means, these producers are able to live with the self-respect of knowing they are engaged in an honest and fulfilling enterprise.” She believes each item sold represents an artist digging himself out of poverty with dignity.

Latitudes ties the community of Warrenton with communities from around the world—economically and culturally. In Warrenton, it represents the community’s own entrepreneurial spirit. Owsley is a fulltime teacher, who started her business with a temporary store set up for the holiday season. She partnered with a full-time artist in sharing the space. “It really helped me to feel that I wasn’t alone in this,” said Owsley, who advises anyone hesitant about opening a shop to find others who can help with costs, labor and courage.

For more information about the store and the artisans it helps to support, please visit their Web site at www.latitudesfairtrade.com.

Be a Culpeper Local

Culpeper, Virginia just received some good press after it unleashed its new shop local campaign, Be a Culpeper Local.  The campaign combines educating the nearly 50,000 Culpeper County residents on the value of buying locally with a website, beaculpeperlocal.com that directs visitors to local shopping and dining options, specials, and a way to track how much of your state sales tax is being returned to local Culpeper general funds and school coffers.

This fiscal year, 2010–11, the County general fund expects to receive $4.5 million (part of which is allocated to the Town), and the school expects to receive $6.4 million. All these millions are from us spending our dollars in Culpeper County!

It may not need saying, but this same math works for every community in Virginia, from Abingdon to Winchester and everyone in between.  This is but one of many ways to  jumpstart a shop local campaign.  If you need more reasons to value shopping local, you can visit this page.

For more information on shop local campaigns and the value of shopping local, peruse our training archives page, visit the Business Alliance for Local Living Economies website or get in contact with the Virginia Main Street staff.

Designing a Marketplace

Is your economic restructuring committee effective?  Challenges like recruiting businesses and interpreting expensive and technical market studies discourage eager volunteers. There’s no immediate result after hours of meetings and planning.  Pressure to see results from business owners, local government and the community compounds the frustration. It’s easy for this committee, in particular, to go inactive.

Main Street organizations all over America have faced this challenge, and many are beating it–by creating compelling and specific visions for their downtown marketplace.  To illustrate the best strategies Todd Barman, Program Officer for the National Trust Main Street Center (NTMSC), features Altavista, a Virginia Main Street designated community, in a recent issue of Main Street Now. 

Barman says “It will take a concrete and compelling vision of a fully functioning future marketplace to attract the entrepreneurs and investors who will eventually realize [their] vision.”   What works for Main Street communities is similar to the strategy of successful commercial developers that are good at communicating their development vision using verbal descriptions, architectural renderings, and diagrams/schematics.  Along with this are specific steps for filling vacancies in historic commercial districts.

“The NTMSC is working to empower Main Street programs to use similar tools to attain similar results.”

Check out the details in the Main Street at Work column of the July/August 2010 issue of Main Street Now, The Journal of The National Trust Main Street Center.

Downtown leaders cover Main Street Essentials at Abingdon training

On Sep. 22 and 23, Advance Abingdon hosted 70 downtown revitalization professionals and volunteers from across Virginia for a training and knowledge share of best practices in the organization and promotion of downtown revitalization efforts.

National Trust Main Street Center Senior Program Officer Kathy LaPlante, a nationally recognized expert on community based downtown revitalization, presented specific strategies for organizing local efforts and promoting local businesses in downtown districts. “Communities across the country are working toward creating vibrant, one-of-a-kind downtown districts,” said LaPlante. “We develop and share best practices, such as how to effectively recruit and use volunteers, and how to fund revitalization efforts.”

Other more specific strategies discussed at the session promote the assets unique to each place. For instance a festival that draws people to a downtown in Virginia will be different from one in Wisconsin. “The overall guide to promoting your district,” said LaPlante, “is to be true in character to who you are as a community. No one size fits all.”

In addition to hearing from LaPlante, representatives of local governments, nonprofit organizations, and businesses shared the latest efforts of their home communities with others from around the commonwealth.

Sponsors for the event helped provide a warm welcome and included Michael’s Pharmacy, Mac’s Medical Equipment, Home Nursing Service of Southwest Virginia, Highlands Union Bank, The Office Place, and the Town of Abingdon. Participants took trolley tours, ate a dinner at the Farmer’s Market, attended a reception at A Tailor’s Lodging, and enjoyed lunch on the town.

Virginia Main Street trainings are open to anyone interested in downtown revitalization, and all PowerPoint presentations and notes from the group discussions are available at the Virginia Main Street training archive.

Virginia tops business lists

Pollina Corporate Real Estate  named Virginia the country’s “Top Pro-Business State” for the second year in a row. The study ranks states based on 31 factors including taxes, human resources, energy costs, infrastructure spending, economic incentive programs and state economic development efforts. And it’s not the only organization touting the Old Dominion.

Forbes Magazine has named Virginia “the best state for business“ in each of its last four listings, ranking the commonwealth in six categories:  business costs, economic climate, growth prospects, labor, quality of life and regulatory environment.

While these aren’t the only measures in assessing our quality of life, they are certainly  important ones, especially as the country works to climb from the economic doldrums.

Is someone in your community interested in starting a business in the state named best for it?  Consider the location of a traditional commercial district like one of Virginia’s Main Street Communities. Tap the commonwealth’s many resources like the Department of Business Assistance’s Business  One Stop and Entrepreneur Express.  And don’t forget the training and technical assistance of the Virginia Enterprise Initiative’s Regional Service Providers.

The unexpected entrepreneur

If you were asked to describe an entrepreneur, what words would you use?  Maybe terms like “bright, energetic, or magnetic.”  This 2004 article in the aptly named magazine Entrepreneur, gives a whole host of other terms, not all of them complimentary. 

Two descriptions of an entrepreneur that most people would not use are “ex-felon,” and “non-English speaking.”  However, it may just be these often overlooked sectors of your community could be an integral piece of your community’s economic restructuring.  In the classic Republic, Plato said, “Necessity is the mother of invention.”  If this is true, then those least able to obtain traditional employment should be those with the most entrepreneurial spirit.

Upholsterer and entrepreneur Troy Graves. Photo by Tara Bozick, Danville News.

Take Troy Graves.  This Danville resident spent a few years in prison, where he apprenticed as an upholsterer, eventually redoing a chair for the Governor’s office.  When he completed his incarceration, he had trouble finding steady work but was determined not to go back to his former ways.  With the help of a partnership with Virginia Enterprise Initiative, New Visions New Ventures and the Small Business Development Center, Troy was able to get business skills training, write a business plan, and obtain a microloan that allowed him to set up shop.   When this newspaper article hit the street, his phone rang off the hook and he has business lined up for the foreseeable future.  Troy is still building his credit, and hopes to own his building one day soon. 

And consider this positive story from National Public Radio from a place where positive stories have been few and far between.  It seems the one part of Detroit that is flourishing is the predominantly Latino neighborhood known as “Mexican Town.”  Many less developed economies have a strong entrepreneurial tradition; again, harkening back to Plato’s words about necessity.  The most entrepreneurial members of these societies often find a way to come to the United States and bring that spirit with them. 

Make sure you consider all aspects of your local business environment when planning your community’s future.  You just might find success in the most unexpected places.