Sheltowee Outpost

5 Tips for economic developers for growing an entrepreneurial environment

5 Tips for economic developers for growing an entrepreneurial environment

Sep 29 2014

 

I have had an interest in economic development for a long time.  I have worked on the state and local level with economic development agencies.  Economic development is a highly politicized process and the agencies responsible are usually ultimately run by politicians.  So this forces a drive to what I call "chasing the big guys".  Much of the efforts are geared towards attracting large companies that will create lots of jobs.  These make much better announcements than announcing, "Chuck Johnson just started a dry cleaning business". 


The fact of the matter is that MANY of the jobs that are created in this country are created by small businesses.  A thriving small business environment is important for any community.  But in the age of mega conglomerates, it is more challenging to foster small business environments.  And with the politicization of the economic development process, most politicians would much rather be able to announce that they have created 250 jobs by opening one auto parts factory, than to do multiple announcements of small businesses, even if they ultimately create more jobs. 


Below are some tips on how communities can help to foster a strong small business environment. 

1. Make it a focus of your economic development strategy- By doing this you certainly do not forsake some of the more traditional economic development activities, but you make sure to attracting and growing small businesses are a part of your strategy.

 

2. Engage the small business community- Be sure to have a communications plan and system for helping small businesses.  Many small businesses feel forsaken by economic development leaders because the potential of catching a big fish seems more important than home growing a lot of smaller fish.  There is nothing more important than engaging the small business community and getting honest feedback. 


3. Development metrics- One of the challenges of entrepreneurial economic development is being able to measure your success.  As I mentioned, when you land a big manufacturing company, it is easy to point to the number of jobs created.  If you develop a system to measure your success in attracting and growing small business, you can convert that into political capital. 


4. Plan announcements- Economic development agencies love being able to make announcements. Plan multiple announcements around your small business economic development strategy.  Announce that you have put together a formal plan, announce the resources you are making available to small businesses, and then do an annual announcement on the results.

 

5.  Re-evaluate- After the end of a year, see what worked and what did not.  Plan on making this a long term strategy and be willing to adjust the strategy. 


As a reminder, remember that the definition of entrepreneur is "one who assumes the risk". This means that all of your small business owners are entrepreneurs. It is nice to have that group of entrepreneurs who are swinging for the fences with new technologies that could make billions of dollars. But don’t allow this group to become the sole focus of your strategy. Make sure that small businesses owners know you have not forgotten them and want to help them grow their businesses as well.

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