story by Kim Souza
Businesses large and small across Northwest Arkansas plan to invest $808 million in expansion efforts adding 965 new jobs by 2015.
This data was collected in a group business retention effort shared by the Chambers of Commerce in Fayetteville, Springdale, Rogers, Bentonville-Bella Vista and Siloam Springs and overseen by the Northwest Arkansas Council.
Mike Harvey, chief operating officer for the Council, and a team from the local chamber offices shared the information on Thursday (March 7) in the comprehensive report and brief press conference. Harvey said the chamber economic teams met with a combined 459 local businesses during 2012 and one third of them are planning expansions over the next three year period.
“We don’t have any year-over-year data yet, but I can tell you that businesses seem to have snapped back sharply in the past year after three years of being cautiously optimistic,” he said.
SILOAM SPRINGS IDEA
The business retention effort is the only one of its kind around the state, according to Perry Webb, CEO of the Springdale Chamber of Commerce. He credited Wayne Mayes and the Siloam Springs Chamber of Commerce for leading the way as they began business retention efforts back in 2009.
Mayes, CEO of the Siloam Springs chamber, said it was a key effort for the “little brother” Siloam Springs because of its position outside the main Interstate 540 corridor.
Each business visited by their local chamber completed a comprehensive survey that rated a number of metrics including: challenges, strengths, hiring projections and future business expansion. That data was then compiled and entered into a computer program “Synchronist” and the results were analyzed by Harvey and the chamber economic teams. Harvey said the group spent about $10,000 to purchase the software program and there is an annual renewal cost of about $1,500.
Harvey said the strengths cited by the companies outnumbered the weaknesses by a 2:1 ratio as businesses generally have a favorable opinion of the local economic climate.
The chamber representatives agree the face-to-face interaction with their local business owners was invaluable and well worth the average 4-hours per company investment. The chambers each invested an average of roughly 1,700 hours toward this project last year.
EXISTING BUSINESS SUPPORT
Steve Cox, economic development director for the Rogers-Lowell Chamber, said the payoff isn’t always instant but you have to plant and water those organic seeds if they are to bear fruit in the future.
“I visited a company back in April of 2012 and they didn’t really have any expansion plans at the time, but we made the contact. Then they called me in January to say they had planned a $10 million investment hiring up to a dozen people and could we give them some help. If I hadn’t made that contact they probably wouldn’t have called us for help with incentives and zoning,” Cox said.
Webb added that between January 2010 and December 2012 there were 40,000 jobs created in Arkansas, 44% of those jobs were located in the NWA metro area.
The group agreed the organic job growth that largely comes from business expansion is key to future population growth. Harvey said roughly three out of every four jobs created comes from an existing business. Lance Eads, economic director for the Springdale Chamber, said during one of his visits last year he encountered a business that needed a larger location to allow for growth opportunities.
“We also ran across another fellow who was trying to sell out and retire from his business. We got these two owners together and they were able to work out a deal that allowed both to accomplish their goals,” Eads said.
He also said one company was sourcing some labor from a high school outside the area. We were able to get him in contact with our local school system who was able to add the kind of training he needs for his business within Springdale schools.
SAFETY, SALES FORCE ISSUES
Chung Tan, economic director in Fayetteville, said one of the key concerns uncovered among visits to the city’s industrial park was safety.
“Now that many of those companies are ramping up to three shifts from two they were concerned about safety during that overnight hours. We were able work with the city and install several traffic lights and the city has budgeted to build a sidewalk throughout the park this year,” Tan said.
She said drilling down to the micro level with the local businesses also showed that a large percentage of them are selling product abroad.
“We are able to work with them and help provide some assistance and training by connecting them with the Arkansas World Trade Center. This has been good,” Tan said.
Jayne Lowe, director of retention with the Bentonville-Bella Vista Chamber of Commerce, called on offices of just one person all the way to multinationals.
“One main concern I saw from some small businesses is that they are having a hard time attracting and retaining a quality sales force because there are so many vendor sales opportunities at high levels of pay,” Lowe said.
Tom Ginn, vice president of economic development at the Bentonville-Bella Vista Chamber said, he encountered a tech company that employed a majority of folks who were software engineers and out-of-country residents. He said these workers obtained visas and secured an Arkansas driver’s license while here. But with the crack down from Homeland Security it was taking much longer to get the work visas renewed which was also triggered the driver’s license renewal which could be done in Little Rock.
“They were loading up a van load of workers several times a month and headed to Little Rock for the driver’s license renewals. Each time the lost a day of productivity and the cost of travel,” Ginn said.
The chamber worked with the Department of Motor Vehicles and now there is someone in Bentonville who can do the license renewals, alleviating the need to travel to Little Rock and allowing the local company to be more productive.
Harvey said the chamber groups would see another 450 businesses year as the retention efforts continue.
Mayes said each year gets easier and bears more fruit at least that has been the case in Siloam Springs since their efforts began in 2009.