Small towns have undergone dramatic change, from being the center of the universe for area farms and villages to becoming isolated bedroom neighborhoods of larger city centers. This change has created difficulties for town governments as well as citizens. As businesses close or move, Main Street becomes a collection of empty storefronts. With a town not meeting their needs, more people look elsewhere to meet their social and economic needs. Town governments found it much more difficult to provide services like education, police and fire with primarily residential tax revenue and diminishing business taxes.
At the same time, residents who mostly worked at locations outside of town often feel like they are visiting the small hometown for overnight and weekend stays. They shopped in strip malls on the way home or made weekend trips to box stores or entertainment locations. Some people even grew tired of the big store visits and began to shop on line, which even further increased their isolation from fellow town residents.
Observers of these small-town changes have identified the situation as a decline in many facets of community life and dramatic increase in pressure on town leaders to reverse the trend. Most common actions involve study committees searching for solutions. However, Committees are hampered by a process of mediocre consensus in trying to bring back the good times of the past.
One of the most common committee approaches is to find and recruit that big corporate business from the outside, which promises jobs, taxes and a good future. Trying to recruit big business is not easy or without problems. A large business can locate anywhere; therefore, it searches for the best deal in everything from highway access, utilities and long-term tax breaks to special zoning exclusions. Towns often negotiate from positions of weakness. Further, many externally recruited larger businesses have corporate structures elsewhere causing profits not to be invested in the town, but rather at the headquarters. As a result, recruiting from outside of town may not live up to all that was advertised.
What then is a small town to do to turn around the economy and increase citizen satisfaction? This problem is not new or unique to your town. Thousands of small towns have faced and, in many cases, solved the problem. The solution lies within the small town, but is often overlooked. As one unnamed town economic study committee reported,
“Our economic development planning survey is attached.
Note: We don't include farms, home-based or mobile businesses.”
Who this town is overlooking are all the small businesses like farmers who produce fruits, vegetables, eggs, honey and other crops and sell them in farm stands and markets. They are overlooking people who sell services like lawn care, snow plowing, home building, house painting, handy and other trades. They overlook musicians, bakers of cakes, cooks of celebration meals and makers of decorations. People who babysit, teach crafts and skills, organize trips and gatherings are overlooked. All the makers, artists and crafters who sell their creations online and in marketplaces are also not counted. Also not counted are all those who provide services and temporary labor. The truth is that every small town can identify a hundred or more small and home-based businesses that form an economic foundation of the community. Every one of these small businesses have the capability of growing and employing others. Collectively, they can build the economic and social revival of the town and even attract new business ventures to town.
There have been numerous studies showing that small businesses are the backbone of the economy and grow much faster than large corporate businesses. They also stay stronger in economic downturns. Small and home-based business must not be overlooked as they are the foundation of a community revival. However, that revival will not happen without concentrated support.
Small business development efforts have found that one of the most successful support structures for business growth and success have been business incubators. Small businesses have higher possibilities of survival, success and growth when incubator support is utilized. Incubator elements usually include the availability of good affordable physical space to allow the business to become established. Access to capital and financial assistance through planning and loan programs which reduce failures due to cash flow problems. Mentoring from SCORE and other small business support systems help apply the experience of success in business growth planning, marketing assistance along with networking with other small business entrepreneurs to reinforce success strategies.
If we know how to successfully grow small businesses through incubator support structures, could a small town apply those same tools to grow a business community, which could provide what is disappearing in terms of jobs, tax revenue and resident enjoyment of community life.
How then could a small town provide an incubator structure?
First, the community has to develop a vision of success along with a project team of entrepreneurs and leaders to keep progress focused on achievement of the vision. Importantly, a traditional committee is not needed. Instead, a community incubator needs a project team following a timeline with specific deliverables.
Second, the strategy to achieve success must be accepted by all elements of influence. Town boards often focus on positions of protection and regulation. Small and home-based businesses have often received “you cannot do that” responses from boards of health, zoning, planning and others. To achieve success, boards need to respond with, “given our laws and regulations, how can we help your business succeed” This climate of success changes the focus from restriction to achievement of the vision.
Third, the elements of incubator support must be identified and made available to businesses and potential businesses. Some of the more successful elements used in other small towns include:
Mentoring – Successful business leaders in the community, SCORE and other organizations who focus on achievement are the best people to help small and new businesses plan, grow and succeed.
Business Space – Often home based and small businesses are limited and isolated in their work and sales space because commercial space may be too expensive or unavailable. Space availability programs can be an effective tool for growth. The inclusion of commercial space landlords in the incubator process can help to develop opportunities like:
Open building tours – Schedule an event date to promote the community vision at a luncheon along with a tour of available space. Assign experienced people to each space to explain the possibilities along with any available rental support programs. Some towns even charge an event fee to cover lunch and promotional costs.
Multiple users of one commercial space – Often a small business cannot fill a commercial space during early growth. In those cases, 2-6 small businesses can share the same space through open or compartmental configurations. This can be very effective with retail businesses by promoting the image of a full-service mini shopping mall.
Businesses under wing – If existing businesses contribute space even as small as a card table, home based businesses can establish a presence and benefit from the mentoring of the host business.
Popup Spaces – If some businesses are seasonable or event driven, temporary commercial space for single or multiple businesses can be made available. This can consist of empty store fronts, farm market type tents or other temporary structures in empty lots. One town placed backyard shed structures throughout an empty lot creating a village marketplace. The structures were rented by home based and agricultural businesses throughout season then the structures were sold off to area home owners at season end.
Mobile businesses – Many small towns cannot support some standalone businesses like clothing, shoe stores or specialty shops. Since almost any business can be placed in a truck or trailer, small neighboring towns could support a mobile business which spends a day or two in each of multiple towns. Mobile businesses like food or farm markets are welcomed at senior housing and residential areas with limited transportation. A group of women entrepreneurs formed traveling clothing and accessory shops in four trucks which scheduled visits not only to multiple towns but to the parking lots of industries and medical facilities.
Maker space – Small craft, art and food businesses need room to make their products. In the case of food production, kitchens must be equipped with proper equipment and be compliant with health regulations. Industrial kitchens are expensive and often unavailable. However. One community incubator solution is to make church or organization kitchens compliant with health regulations and available for rent to food businesses when not being used for organization functions. The same idea could function with makers and available hall spaces.
Finance – Funds availability and financial management are critical for small business success. The community incubator can identify SBA lenders and other capital sources. The provision of financial education, accounting resources and tax management assist small businesses in managing finances.
Marketing – One of the most successful activities of a community incubator is linking customers to the small businesses. Coordinated activities such as social events and festivals are pleasant activities for residents as well as sources of customers for businesses. Every town has a historic site and famous residents which can form a foundation for tourism destination activities. Small town marketing is really business collaboration and total community involvement in social, educational and business growth.
Technology – Today’s businesses utilize developing technology to stay in the marketplace. Software mapping programs provide accurate promotional paths to small town business incubators. Through technology and personal service small town businesses can outperform box stores and online markets.
Education – A small town incubator is a coordinated community growth activity, which touches every resident and business. The cement that ties it all together is education on an individual and formal basis. Sponsored education like How to Start a Business to How to grow a Business keeps the incubator full of startups. Youth business education programs for the Lemonade stand age children are always successful in building the entrepreneurial spirit and personal achievement and tomorrow’s business owners.
Conclusions and visions
Business incubators have proven to successfully grow businesses rapidly. Small towns who recognize and collaborate the many agricultural, small and home-based businesses within their communities are far ahead of waiting for that big business to settle there. The new Main Street growth and success will come from coordinated incubator activities and structure. The net result will transform small towns into growing vibrant living, social, economic and working spaces.
