Business Retention: Helping Companies Compete in a Global Economy

by Erik Collins, Economic Development Manager, Montgomery County, Ohio

The American economy is changing rapidly and dramatically. Industries that once were the backbone of many communities are on the wane, and the opportunities for new paths to growth aren’t always clear. In the face of such drastic change, where can elected officials and community leaders turn for the greatest positive impact?

SK Tech is a Japanese company that has tripled in size since locating its new building in the city of Englewood in Montgomery County, just over three years ago. The Business First! team worked with SK Tech throughout its growth.

The solution is readily at hand in every American community: It is the employers who are already located there. Studies have shown that up to 80 percent of job growth in any U.S. community comes from existing businesses, not from attraction prospects. It makes sense – and good use of limited economic development resources – to encourage local employers to stay, grow and add more workers.

Elected officials and economic development organizations in Montgomery County, Ohio, the city of Dayton and the greater Dayton region have taken this approach to heart. Together, they have developed a collaborative business retention program – BusinessFirst! For a Greater Dayton Region – that addresses retention and expansion opportunities of existing businesses, systematically and comprehensively.

Recognizing the need

In 1999, a core group of economic development professionals from the Montgomery County Economic Development Office, the city of Dayton, the Downtown Dayton Partnership, CityWide Development Corporation (the city’s financing and development arm) and the Dayton Area Chamber of Commerce met to discuss how best to develop a systematic business retention and expansion (BR&E) program. The goal was to focus initially on the city of Dayton, with the idea of replicating it in the remaining Montgomery County communities.

For a number of years, staff from the city of Dayton’s economic development office, the Downtown Dayton Partnership and CityWide Development Corporation have worked closely to conduct business retention and expansion visits with Dayton-area companies – sometimes jointly, other times individually. Over time, it became apparent that while the organizations were successful in meeting companies and identifying needs, there was an information gap among Dayton-based economic development organizations (EDOs). There was no way of knowing about – or ensuring the consistency of – the level of service that was being delivered to any given company during BR&E visits.

In some instances, staff from agency B would contact a company that had already been interviewed by agency A and received business development assistance. Inevitably, the CEO of the company would comment, “I have already answered questions like this.” EDO staffers recognized that it was necessary to eliminate these embarrassing situations.

To begin developing a systematic, countywide retention and expansion program, members of the core group evaluated programs from different parts of the country. Some of the members had attended training courses about how to create an effective retention program. Others looked at off-the-shelf retention products and visited EDOs outside the region that were actively conducting BR&E programs. Other members of the group searched for consultants who had developed BR&E programs. From this research, the group concluded that:

• Some organizations were more interested in gathering data and generating reports than in establishing longterm relationships as a way of effectively assisting businesses. Our core group believed that relationshipbuilding was a major attribute of an effective BR&E program.

• Off-the-shelf products were limited, and at the time of the research, the technology was not web-based or security protected. It would have been cost-prohibitive to customize programs and adapt the technology to a web-based system.

• There was a great disconnect between EDO staffers who met with the CEOs of companies (outreach specialists) and resource organizations. A team approach, linking the two parties to serve local businesses, was lacking.

• Outreach specialists – the staffers out on the front lines meeting with businesses – lacked training. Our core group felt that the economic development professionals who met with business owners needed a framework for conducting visits and improved sales skills to better interact with CEOs.

• Few qualified consultants existed who focused on economic development BR&E programs.

In November 1999, 14 Montgomery County jurisdictions jointly applied for an Economic Development Government Equity (ED/GE) grant, which was approved. The grant was was used as seed funding for BusinessFirst! For a Greater Dayton Region, the region’s new BR&E program.

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