Entrepreneurs play a bigger role in the health of their cities -- and reap more from their success -- than you might suspect.
Location, location, location! We’ve all heard that, for many small businesses, one of the keys to success lies in landing the right real estate. But the reverse is also true: Small businesses are essential drivers of America’s cities, and your company and others like it have the capacity to make your city a prime location, location, location!
As businesses invest in their community, the community grows and becomes healthier. Businesses then reap the benefits of being part of a thriving community. This principle of shared value – creating economic value while also creating value for society – lies at the very heart of economic success.
Here are five ways your business can increase its competitiveness by helping to re-energize your city.
1. Your Neighbors; Your Talent. Hire Locally.
Before looking at outside talent, fill positions with residents of your own community if possible. Hiring locally benefits your business, your city and your neighbors.
Employees who live and work locally are more engaged, and their employers enjoy increased employee retention and reduced fringe costs. Seeking talent locally and promoting from within is good for your neighborhood too: it boosts local employment rates and drives dollars back into your community.
2. Train to Retain. Invest in Your Employees.
A well-trained workforce is one that sticks around. By investing in your employees, your business is more likely to be able to successfully retain competent, satisfied workers.
The fastest-growing urban firms spend 5% of payroll on training, compared to 2% spent by the average large corporation. That helps them cut employee turnover by half. Encourage your employees to pursue training and education related to your business. Look to community colleges, anchor institutions and nonprofits to provide some of that training and education. The workers that take advantage of these resources are more likely to reward you by staying put.
3. Buy Locally
Sourcing business supplies from your own zip code can be efficient, community-minded and sustainable. Seventy-two percent of the fastest-growing urban firms purchase locally. Why? Doing so creates an efficient and diverse supplier pool, and helps them reduce their environmental footprint.
By unbundling contracts and purchasing locally, you create a strong supply chain and a healthy business ecosystem. The result is a more competitive pool of vendors and suppliers that can better meet your business needs.
4. Connect, Talk, Collaborate. Build a Cluster
Rather than viewing similar business as competition, look to them as collaborative partners and as part of your support network. As companies in similar industries collaborate, they create a swarming effect and draw others to them. Your community college might not create a training program for just one logistics company, for instance, but if a group of logistics and transportation-related companies are all located in the same city, that same college may suddenly want to train graduates to work in that industry. Likewise, it will start to make sense for suppliers and other similar companies to be located nearby.
The Louisville Park Hill Corridor is just one example of small businesses joining together to improve their own business climate and that of their city.
5. Settle in the City
With the recent economic downturn, city real estate is more affordable than one would think. Small businesses can change the entire fabric of a community by investing in vacant office and industrial space.
There are numerous federal and local tax incentives available to help you do this. Programs such as HUBzone and New Market Tax Credits reward small-business owners for choosing to locate in underserved areas. As companies move into these areas, a ripple effect can draw new retail, commercial and residential development to the neighborhood.
We’ve read the stories of Zappos and Microsoft moving suburban employees into cities. But you don’t have to wait for corporate giants to begin transforming your neighborhood. Small businesses, which account for 99.7% of all U.S. companies, also are responsible for the majority of new jobs created over the last two decades, and will continue to fuel the economy as the country re-urbanizes. And your small business can help lead the way.
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