Helping community residents to start and build their own businesses—“homegrown businesses”–is an important strategy for communities of any size. But, in smaller communities, it can be the best and only strategy. Adopting an intentional “Grow Your Own” strategy can have an important impact on job creation and the vibrancy of the community.
Grow Your Own is an umbrella term for economic development models that use entrepreneurship and small business development as the tool to create economic growth. Grow Your Own focuses on local strengths, small businesses and entrepreneurs in one’s own community–instead of spending resources to attract companies from outside–as a way to foster economic growth. It involves developing support resources for entrepreneurs, innovation, and access to capital and markets.
Why is it so important? First, businesses started by local entrepreneurs are often loyal to their communities; they are more likely to choose to grow their businesses in their communities. In the early stages, they are more likely to hire employees from the community. In other words, they are “sticky”. Their stickiness only increases as they add employees, and those employees have spouses employed in the community and children that attend local schools. The businesses are dependent upon the talents of those employees to grow their businesses and, therefore, leaving the community is not an option.
Second, entrepreneurs and small businesses create jobs. According to the U.S. Small Business Administration, small businesses represent 99.7% of all employer firms, and employ half of all private sector employees. Small business is a significant portion of the U.S. economy.
The goal is to assist homegrown businesses with growing to a sufficient scale in which they can have a significant economic impact on the community, and then retaining those businesses. In an upcoming blog (Part Two), we’ll discuss the best model for supporting and retaining homegrown businesses in your community.