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4 <br /> <br />Economic Development Reference Guide <br /> <br />Business Retention and Expansion <br /> <br />Healthy communities have strong, healthy businesses. As competition among communities for <br />increasingly footloose businesses heats up, business retention programs have become the most <br />popular economic development efforts of communities nation-wide. While retention programs <br />emerged in response to business defections and the negative impacts those defections have on the <br />local economy, they have increased in importance as communities recognized that real job <br />growth over time comes from local business expansion. Surveys of U.S. economic development <br />organizations rank it as the number one economic development activity. <br />Business retention programs assist small businesses to prevent their relocation and to help them <br />survive in difficult times. Retention programs typically involve partnerships among public and <br />private organizations that assess the assets and opportunities of individual companies through <br />periodic surveys, interviews, and visitations. The purpose is to establish relationships between <br />community businesses and economic developers to strengthen existing companies, establish <br />early warning systems to flag at-risk businesses that require assistance, and ensure that public <br />programs meet local business needs. Business retention initiatives usually include a mechanism <br />for linking expanding businesses with public programs designed to mitigate growing pains and <br />regulatory issues. <br /> <br />Trends in Business Retention and Expansion <br />BRE is the one of the main priorities of state and local development professionals. Local <br />businesses have strong community ties, reducing the risk of leaving and BRE programs are often <br />less expensive than business attraction, yielding more jobs on average. <br /> Low-interest loans, available to businesses purchasing land, refurbishing buildings, and <br />new equipment. <br /> Bond programs are created to help lower the cost of borrowing for a business; the interest <br />on a bond is much lower than on traditional bank loans. <br /> Increased use of zoning to encourage and discourage desirable and undesirable business <br />expansion and retention <br /> Low-cost training provided for the workforce of businesses and industries, allowing them <br />to remain competitive, this is usually provided locally through a variety of counties or <br />state programs. <br /> Tax credits for businesses encouraging business retention and expansion.