>The Big Business Hangover

>Cities like to get drunk on big business. After all, when a big business moves to town creating hundreds of jobs, it makes big headlines. But the morning after can be painful.

Two years ago, the city of McGregor, Texas was euphoric. Dell Computers opened a call center in this town of 6000 people just 12 miles west of Waco. Big business was coming to a small town and it made big headlines.

Yesterday, that center closed and 260 jobs went away. At its peak, 400-500 people were working at the Dell call center in McGregor. The closing also leaves a 52,000 square foot building empty. That facility used to be the city’s administration building. The city of McGregor spent $850,000 bringing the building up to code and then let Dell use it.

What If….
Was there a better use of $850,000 and a 52,000 square foot building? How many small businesses could have been given a jump start with that money and that space? What if the city of McGregor had offered 52 entrepreneurs a thousand feet of office space, and used the $850,000 as matching funds start up money? How many of those businesses and how many jobs would still be in McGregor today?

Many cities and Chambers of Commerce have economic development committees that are really big business economic development committees. Their goal is to recruit big employers to come to town and provide a big bunch of jobs all at once. It makes a pretty nice headline.

The Wrong Focus
These businesses are offered tax incentives, given land, buildings and other goodies to come to town. The cities spend a pretty penny flying around and recruiting the big businesses then open up their wallets some more to wine and dine them when they come to scout the town.

Yet every day new small businesses are started in these towns, and they are largely ignored by economic development committees. That’s a shame. Small businesses are the backbone of American communities. I’ve found that it’s the small, local businesses that do the heavy lifting in communities. They do the volunteer work with civic, charitable and church organizations.

The sad irony is that small businesses also provide most of the jobs too. According to an August report from the Small Business Administration, Businesses with fewer than 20 employees account for 90 percent of all U.S. firms and are responsible for more than 97 percent of all new jobs.

These jobs are being created not by economic development committees, but by the dreams of the entrepreneurs. Every month, thousands of Americans decide to grab their dream and start a small business.

I’m not anti-big business. Big employers have their place in a community, but it’s not on the highest pedestal. Because it’s the small business and the local entrepreneur that give a town its character. Think of all the little unique businesses in your hometown. What would happen if you took them all away tomorrow? Your town would have no flavor. It would be just one of a thousand homogeneous cities across America, falling all over each other and opening wallets to attract the next Dell call center.

Time for an Intervention
Yes, it’s easy for me to offer criticism after the fact. The Dell call center closing in McGregor gives me a big headline and the opportunity. But allow me to offer some advice for the future. The best way to avoid a hangover is to not drink too much the night before. To all the communities using your valuable resources chasing after the big employers: lay off the hard stuff. Put the bottle down.

Encourage entrepreneurship in your community. Sprinkle some seasoning on your home town by adding small businesses. You won’t get the big headlines announcing hundreds of jobs, but you’ll also avoid the big headline when you lose hundreds of jobs in one day…and the headache that goes with it.

Note: This blog is about small business marketing lessons and advice, but I have a passion for small business and felt this was important.
For small business marketing case studies and ideas, see my other blog: The Idea Spot
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