Why Business Retention and Expansion Plans are Important for Downtowns


Small businesses are the driving force in today’s economy, especially in downtowns.   According to the Small Business Administration (SBA), there are 28 million small businesses in the U.S. which account for 54% of all U.S. sales.  Additionally, small businesses provide 55% of all jobs and 66% of net new jobs since the 1970s (https://www.sba.gov/content/small-business-trends-impact). Therefore, it’s critical for all communities and downtowns to have a business retention and expansion (BRE) plan in place to help local small businesses, providing them with opportunities to be successful.  After all, small businesses help increase the number of local jobs, preserve or increase the local tax base, increase property values, enhance the community’s image, increase consumer confidence, and diversify the local economy.

It is easier and cheaper to keep an existing business than it is to replace one. A business retention and expansion plan, properly implemented, not only helps keep businesses open but possibly even helps them expand.  For local governments, think of the sales and property tax lost by having a vacant building.  For Main Street practitioners, think of the image of what an empty building conveys to consumers and how that affects the overall confidence for investment in your downtown.  There are four major components to consider when designing a local BRE plan.

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1. Team Building and Partnership Development.  As with any major community or economic development endeavor, it is important to form a strong team to help carry out the plan.  When building a BRE team, consider the skills and resources that are needed in order to serve the local businesses.  Is industry knowledge represented on the team?  Is the team outcome oriented?   How can partner agencies help? Can they provide services to businesses?  When forming your team, consider training and utilizing local volunteers for business visits.  By using local volunteers, connections and relationships are made stronger and using volunteer labor can help a program’s budget as well.  Make sure all partners understand and acknowledge the purpose of the program.

2. Relationship Building. With a team in place, outreach to businesses can begin.  The first efforts should focus on building trust with business owners and managers.  Once a relationship is formed, start collecting data about the business and its needs. There are several ways to collect data: focus groups, on-site business visits, or surveys. Use local community knowledge to establish a rapport with the owners and managers. Make sure to communicate the intentions of the BRE plan and follow up on any commitments made.

3. Responding to Business Needs.  After data is collected, it will need to be analyzed and understood.  First, respond to any “red-flags.”  If there is a business in risk of failing, what can be done to help?   Assistance to individual businesses at this stage will need customized solutions.  Secondly, use the information collected to create technical assistance, marketing assistance, or operational assistance programs.  If possible, create financial assistance programs geared to help businesses expand. Lastly, this data can inform long-term development programs and help local governments create policy for retention, expansion, attraction programs and funding.

4. Management and Follow-up. You will need human capital, a sufficient budget, and technology to ensure that business visitations and the technical assistance are effectively managed.  As with any program, if there is a budget, hire a coordinator or dedicate existing staff time to oversee the BRE plan. Make sure to maintain information on workforce, technical, and financial resources available to businesses. Maintain a database about the businesses and their needs and make sure to market the program and its services to the entire business community. As with any good plan, make sure it is measurable and flexible.  Make adjustments as needed.


The local businesses in your downtown are as important to placemaking as much as, if not more than, the buildings they operate in.  They provide the experiences and interactions where visitors have a memorable meal or buy an artisan gift that can’t be found anywhere else.  Small businesses also generate the sales tax which, in part, funds local governments’ operations and infrastructure investments.  If you don’t have healthy businesses, you can’t have a healthy community.  Properly implemented BRE plans can help businesses become more competitive and remove local obstacles that interfere with the success of business.