Business retention and extension program helps rural communities grow their economies

The program, established in 1990, surveys and analyzes small businesses.

Kelly Gulbrandson

When small-community businesses struggle to stay open, a program within the University is there to help.

The University’s business retention and expansion program, established in 1990, has offices to survey and analyze small businesses’ problems statewide.

Depending on the size and state of the community, costs for University analysis range from $5,000 to $18,000.

Area program director Michael Darger said former University economics professor George Morse started the program after finding smaller economies develop better with outside help. To date, it has worked with about 50 communities to improve their economies.

“The extension service has several program areas and our program fulfills the community vitality area,” Darger said.

The program works with a community’s businesses for two to three years, he said, but if an area is too big, the program won’t be as effective.

Attracting businesses to a small community and expanding existing ones are two main aspects of the program, he said.

Once contacted by business extension and retention services, one of the program’s “educators” is sent to survey the situation, including what types of businesses are already there and how they currently attract customers.

The results are analyzed by professors within different colleges, Darger said. A 60- to 70-page report is brought back to the community, he said.

“We don’t solve the problems for them, just present solutions to them so they can decide,” he said.

Program educators are currently working in Big Lake and Fairmont. Big Lake’s Chamber of Commerce wants to strengthen the city’s relationship with the younger work force and bring more businesses to the area, Darger said.

Media coordinator for the Big Lake Chamber of Commerce Karen Barta said the city became interested in the program a year ago.

“We looked at the program and decided it would be a good way to look at where we have been and how to make it the most successful it could be,” she said.

With the Northstar commuter rail coming to the city in a few years, development is increasing, Barta said.

The city is now choosing from the program’s project ideas.

“It has taken a lot of time and work,” she said. “But it will be a tangible measuring stick to show that we have done some good in the community.”

John Stavig, program director of the Gary S. Holmes Center for Entrepreneurship at the University, said though he hasn’t heard of the business retention and expansion program, he said he thinks it would be a good program for students interested in entrepreneurship.

After students graduate, many return to their home towns to start businesses and have trouble gaining the credibility and experience to get their companies “off the ground,” he said.

Assistant extension professor Claudia Cody works with communities in the west and south metro areas near the Twin Cities.

“The program is a venue for leaders to come together and empower the community,” she said.

A majority of community jobs come from existing companies, she said.

“People get excited with the concept of bringing economic development from the people, to the people,” Cody said.