===================================================================== Center for Community Economic Development University of Wisconsin-Extension Community Economics Newsletter No. 299 September 2001 ===================================================================== A Newsletter from the Center for Community Economic Development; Community,Natural Resource and Economic Development Programs, and University of Wisconsin-Extension, Cooperative Extension Service ===================================================================== IMPROVING ABILITY TO CAPTURE DOLLARS by Glen C. Pulver* On this Community Economics, the previous one and the following three, we are going to repeat the community economics numbers 112 through 116. We take this unprecedented step because as many of you start to wrestle with the economic development portion of smartgrowth/ comprehensive planning it strikes us that what the late Glen Pulver said has relevance in terms of economic development planning. No. 113 March 1986 Farmers, the self-employed, workers, retirees, and businesses of all types in every community control a substantial amount of funds with which purchases will be made. Every dollar expended within the community for retail and wholesale goods and services as well as other industrial inputs adds to the employment and income of the community. These dollars may, at least in part, be re-spent in the community. In contrast every expenditure made outside of the community not only reduces the immediate employment and income impact but also the likelihood of an internal multiplier effect. In some communities thousands of people pass by the community on interstate highways or visit a nearby tourist attraction. The dollar spent locally by non-local people is as valuable as those generated by the exports of goods. A number of specific actions may be taken: 1) Surveys of consumer needs and buying habits can identify the market potential of retail and service outlets. Once opportunities are identified individuals of firms can be encouraged to do more specific market and financial feasibility analysis. Support mechanisms can also be provided which help individuals through the difficult business analysis. 2) The share of the retail market captured can be improved through downtown analysis and renewal. Highly sophisticated and costly plans and drawings are seldom implemented without early and active merchant and local government participation in the entire process. Often times public funding assistance can be provided through state and national historic preservation programs. 3) Quality service is critical if dollars are to be kept in town. Friendly and efficient service is the cornerstone of all successful businesses.. Employers can be aided in developing employee-training programs. 4) Purchases by non-local people (tourists, citizens of neighboring communities) can be expanded by appropriate promotion and advertising. Every place is unique in some way (natural resources, historic events, ethnic heritage, creative imagination). This uniqueness is exploitable. Organized effort by a number of people is required. 5) Local citizens and businesses can be encouraged to buy locally through informational programs. The critical element is the use of contemporary purchasing and marketing techniques by those who have something to sell. Advertising, merchandising, and buying systems which served well five or ten years ago are now badly out of date. The competition is often not next door or in the next town but in the large shopping mall or discount store in a city miles away. Community leaders can help organize educational programs and joint promotional efforts. 6) The most vibrant and alive retailing centers are those which combine effective product and service merchandising with recreational activities. In days gone by people went to the city center to buy goods and to meet their friends. The city park, courthouse square and bandshell are symbols of the era. Large shopping malls and more recently large city centers have rediscovered the rewards of combining fun and sales. 7) Collective action through the formation of organizations such as chambers of commerce, business clubs, and downtown associations can breathe life back into many retail and business communities. These organizations can serve as useful catalysts in encouraging industrial and government leaders to buy as much as possible locally. *Professor of Agricultural Economics, University of Wisconsin-Madison and Community Development Specialist, University of Wisconsin-Extension. There are five general strategies by which employment and income can be improved: (1) improving the efficiency of existing firms; (2) improving the ability to capture dollars; (3) attracting new basic employers; (4) encouraging business formation; and (5) increasing aids received from broader governments. This issue of Community Economics is one of five which focus on ways communities can improve their job and income prospects. Ron Shaffer Community Development Economist Issued in furtherance of Cooperative Extension work, Acts of May 8, and June 30, 1914, in cooperation with the U.S. Department of Agriculture. Carl O‘Connor, Cooperative Extension, University of Wisconsin-Extension. University of Wisconsin-Extension, U.S. Department of Agriculture and Wisconsin counties cooperating. UW-Extension provides equal opportunities in employment and programming, including Title IX and ADA.