MANISTEE, MICH. - Most people think an economic developer’s greatest tool is a grant or tax incentive. In reality, the greatest tool is a business retention visit. Business retention visits provide an opportunity to meet with local businesses and understand the successes and challenges of operating within a community. Through these conversations, barriers to growth can be identified, and economic development efforts can be effectively directed. A robust business retention program is a critical asset for any community. But why should businesses, residents, and local leaders care? Why is retaining existing businesses so important to a community’s success?

Business retention is crucial to a community because existing businesses drive the majority of local economic growth. Existing businesses make up to 80% of new job growth within a community. This means only about 20% of net job growth can be attributed to companies relocating from outside the area. Local business growth that generates job creation typically does not receive headlines. This often leads residents to believe that only business attraction creates jobs, because that type of growth is more visible in the news. However, businesses already located within a community are its most reliable investors and drivers of growth. When businesses leave, the community loses one of its most consistent and sustainable sources of investment.

Beyond creating new jobs, retaining businesses is also essential for protecting the jobs that already exist. Jobs that currently exist in a community are the jobs residents already depend on for income and stability. If firms downsize or close, the impacts are immediate and significant for workers and their families. When a local business expands and adds jobs, it represents a more practical and sustainable growth strategy than relying solely on jobs from new companies. Existing businesses form the economic baseline; attracting 50 new jobs is not a true success if 50 jobs are lost at the same time. Being able to maintain what a community already has makes business retention critical for a community’s success. 

In addition to supporting job growth and stability, business retention also provides a significantly stronger return on investment for communities. Attracting new businesses can be an expensive endeavor. Communities often must invest in infrastructure improvements, marketing, incentives, and more to support an effective attraction strategy. These investments must also be sustained over long periods, often with stretches of limited or no immediate results. In contrast, supporting the growth of local businesses is far more cost-effective than attracting new ones. Some estimates suggest it can be up to ten times more expensive to attract a new business than to grow an existing one. The return on investment from retaining existing businesses far outweighs that of attracting new ones. 

Communities that prioritize their existing businesses aren’t just supporting what they have, they’re investing in their most proven path to long-term growth. New businesses moving into the area may generate headlines and attention, but steady, reliable growth comes from the businesses already operating within Manistee County. Business retention is a key activity here at the Manistee Area Chamber of Commerce. If you are a business in Manistee County and would like to schedule a business retention visit, please contact the Manistee Area Chamber of Commerce at (231) 723-2575 or email Development@manisteechamber.com.

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Andrew Stafford is the Director of Economic Development at the Manistee Area Chamber of Commerce, a non-profit 501 C (6) organization, whose mission is to build a dynamic and sustainable organization to serve the Business, Workforce, and Economic Development needs of all in Manistee County. You can contact the Chamber at 231-723-2575 or engagement@manisteechamber.com.