Maybe this has happened near you: Rumors swirl about a global powerhouse corporation relocating to your town, or an area in your county has been designated as a new technology hub. These are regional economic development initiatives, and projects like these can bring tremendous opportunities and challenges for small businesses.
Here, you’ll learn the common rewards and risks of regional economic development on small businesses and how you can leverage potentially game-changing opportunities with some planning and preparation.
What is regional economic development?
Regional economic development typically involves major and multi-faceted initiatives that aim to have a positive impact that ripples throughout the region. These initiatives aim to revitalize a low economy or to establish a new industry in a yet-to-be-developed area. In most cases, part of the incentive includes taking advantage of available resources at lower costs.
These projects often include one or more strategic sectors or targeted industries that receive significant government protection and investment, like technology, advanced agriculture, bioinformatics, and clean energy. Even a single company may present significant plans to invest in an area. In both cases, the investments are huge, often calculated in the hundreds of millions or even billions of dollars in projected private investment and public funding.
How to prepare your business for regional economic development
When a regional economic development initiative comes to your area, there can be tremendous opportunities, but if you’re not fully prepared, these opportunities can quickly overwhelm your business.
Here’s how to make the most of these projects:
1. Be informed from the start
A lot of research and planning goes into potential regional economic development initiatives well before getting the green light, including community meetings, planning groups organized through local Chambers of Commerce and industrial development agencies, and more – along with a lot of publicity.
To leverage a regional economic development opportunity, you’ll want to follow the news and join local business groups to learn as much as you can about the potential plan and its initial goals. Here are some important questions you should answer:
- Is it focused on one or more industries?
- Will there be a relocation or expansion of a major corporation?
- What’s the potential timeline?
What to avoid: Don’t assume that because a project doesn’t get the green light right away, it won’t happen. Regional economic development initiatives are extremely complex and some take years to come to fruition.
2. Identify the opportunities for your business
Once you learn about the industry type or the corporation coming to your area, you’ll need to start thinking about how your business can benefit.
Sometimes, the potential impact is clear – if the initiative involves construction and you have a welding business, there will be opportunities for direct engagement. However, if your business is a salon, the impact may be less obvious – until you consider that 5,000 people will relocate to your area for jobs, which means a lot of potential new clients.
Your business may need to adjust to include:
- Adequate insurance coverage
- Safety and compliance procedures
- Reliable financial statements
- Scalable staffing and production capabilities
- Updated cybersecurity protocols
- Registration as a vendor in the appropriate supplier systems
If your business could indirectly benefit, determine what success would look like, such as thousands of potential new customers for your business. Also, consider whether your business goals even include this kind of growth – it’s not for everyone and every business.
What to avoid: Don’t assume that your business is too small or too disconnected from the project to benefit. Major initiatives often rely on local suppliers – if the suppliers can meet the project’s needs and standards.
3. Position your business for success
As a small business owner, there’s always a hundred things on your to-do list, but if your area is under consideration for an economic development project and you want to leverage the opportunity for growth, don’t put off these efforts any longer:
- MWBE certification: If your business is eligible, apply for Minority- or Women-owned Business Enterprise (MWBE) certification (or your area’s equivalent certification). It can be a game-changer, but the process can take time – several months is typical. Whether or not the economic-development initiative moves forward, this certification will make your business eligible for special opportunities and contracts.
- Implement or improve your business systems: If any of your internal business systems are lacking, put programs and routines in place. For example, if you’re not using a software program to manage bookkeeping, inventory, and payroll, you risk falling behind when a significant opportunity arises. There are affordable software programs that make it easy to get organized now and to scale quickly, if needed.
- Build channels for staffing, supplies, and other essentials: To ensure that you have the resources you need, start building relationships now for potential staff, vendors, and other needs. Once an economic development program is approved, potential employees are likely to be snapped up for a wide range of related opportunities.
For example, creating an internship program at your business in partnership with a local community college before the project gets underway can help you build a lasting relationship that benefits you and your interns down the line. - Use your local small business resources: Your local Small Business Development Center (SBDC) and SCORE experts can help you update your business plan and financial projections to include opportunities for scaling your business. They can also help you prepare for financing, if a loan or line of credit will help you achieve your new goals.
- Acquire your business’s property: If you’ve been considering buying commercial real estate for your business and it would be feasible with the right financing, don’t delay much longer. Once a project gets the green light to move forward, property values around it tend to rise quickly – and if you don’t own your property, you may find your lease payment increase is too high to manage, or you may lose your location altogether.
What to avoid: If any of these things are on your to-do list, don’t procrastinate. Whether or not a major initiative moves forward, these are all essential components of small business growth.
How else can you prepare for regional economic development?
In addition to the steps already mentioned, be sure to consider things like:
- Your business’s location and how it may be impacted by increased traffic (foot, auto, or public transportation).
- How residential and commercial real estate around you may change (and how that will impact where you live and work).
- The potential increased demand for your goods and services, and how you’ll meet that.
While these opportunities are exciting, they can also be overwhelming, so seek information and guidance from your local SBDC or SCORE, as well as your city, county, or state economic-development agencies. You’ll also find great information through local business-incubator programs, which are often located on and operate in conjunction with colleges and universities.
Pursuit has the financing to leverage opportunities
When a regional economic development project moves forward, there’s inevitably a mix of opportunity and disruption for small businesses. Preparation is key to optimizing benefits and reducing risks – and if you need financing to best position your business, Pursuit can help.
As a leading small business lender serving businesses across New York, New Jersey, Pennsylvania, Connecticut, Illinois, and Delaware, we offer loans and a line of credit from $10,000 to $5.5 million for working capital, commercial real estate, equipment, and much more. We also provide information and resources that can help you create a path to success.
Contact us today to learn more.
