Romer: Business retention key to economic vitality
Acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one. Most businesses understand that keeping your current customers happy is a basic business principle. An added bonus? You don’t have to spend significant resources attracting new customers.
The same is true for communities; keeping our current businesses and allowing them to grow and expand locally is a basic principle. Yet business retention and expansion typically remains in the shadows of the more glamorous practice of business attraction. Retention of current businesses is more effective when it comes to addressing the fundamentals of growing and sustaining a healthy local economy.
Vail Valley Partnership has partnered with Eagle County to launch SmartBusiness Eagle County to interview local businesses in order to better understand the climate in the county for improving retention and supporting future expansion and to link local businesses to resources. Our economy is driven by local businesses and our best path forward is to ensure they can grow and succeed locally.
All interviewees articulated both strengths and weaknesses in conducting business in the local community. Not surprisingly, the greatest strengths include the tight-knit community, the connection to the ski industry, and the quality of life.
Overall, businesses were able to articulate a greater number of strengths than weakness. When considering the weaknesses, barriers to growth, and reasons the community might not be considered for future expansion, several common themes emerged. The lack of affordable housing, high cost of living and the impact this has on local workforce quality and worker availability were frequently discussed.
Workforce availability, quality, and stability is a concern for local businesses, with ratings in these areas all falling below the midpoint of the scale used to measure them (there are no significant differences of these ratings based on location within the county). Two-thirds of the businesses are reporting recruitment problems and over one‐third indicate that the number of unfilled positions is increasing.
Overall, there was considerable variability of responses based on the industry sector and where the company was in terms of its life cycle. There were also some important differences that emerged between specific municipalities. For example, running a business in Vail or Beaver Creek has unique challenges not seen elsewhere in the county.
These variables include industry sector, select municipalities within the county, where the business is in its life cycle, the maximum extent of the market for the business, change in sales for the business over time, as well as other key variables that may emerge during the course of future analyses.
The SmartBusiness Eagle County project is an ongoing effort to better understand policies and supports needed to retain primary businesses in the county, facilitate their growth, and attract other primary businesses from outside the county to locate here.
Existing businesses and the local workforce are key barometers of a community’s economic health and small businesses are the major drivers of job growth. In Eagle County, 90 percent of all existing businesses employ less than 20 people. These businesses are the often-overlooked growth machine of our community — and are the ones most likely to add new jobs.
The program is intended to help focus the energies of community stakeholders on the economic assets that already exist in our region, and to help make them stronger and more resilient over time. A strong community is dependent upon a diverse and resilient economy, and retaining businesses is a key factor to build this foundation in Eagle County.
Chris Romer is president and CEO of the Vail Valley Partnership, the regional chamber of commerce. Learn more at http://www.vailvalleypartnership.com.