lets make brevard a great business community
TRANSCRIPT
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What Makes a Business Great?
• Strong, consistent revenue growth.• Strong profits.• High return on investment.• Mission accomplishment.• Dominance.• Good cash flow.
If I Could Grant You One Wish …
• More customers?• Richer customers?• Smarter customers?• Better location?• Bigger facility?• Better technology?• Better work ethic?• Smarter employees?
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What Makes a Business Community Great?
• Strong, consistent revenue growth.• Strong profits.• High return on investment.• Mission accomplishment.• Dominance.• Huge positive trade balance.
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If We Could Change One Thing …
• More customers?• Richer customers?• Smarter customers?• Better location?• More commercial space?• More technology companies?• Better work ethic?• Smarter employees?
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Cycle of Low Prosperity
• Problem: – Our customers aren’t rich.
• Why not? – Our customers are us & our employees.
• Huh?– Until our businesses prosper, we and
our employees can’t become the rich customers our businesses need in order to prosper.
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The Key: Where We Spend Our Money
• Objective:– Maximize the number of times our
money is re-spent here before it leaves Brevard.
• Strategy:– Buy from each other – i.e., buy local.– Help and promote each other.– Become great individual companies.
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Consumer Spending
• Average Brevard household take-home pay: $3,200/mo– Mortgage payment– Insurance – property, car, life, health– Property taxes, sales taxes, tolls– Car payments– Tuition, books, room & board
• Remainder to spend here: Peanuts
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Spending the Peanuts
• Where & how determines Brevard’s prosperity.– National vs. local businesses– National vs. local products
• Two keys to our prosperity– What share of each purchase leaves
town immediately?– How many times is a dollar re-spent here
before it leaves town?
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Key Concept: Local Premium
• More of our money stays here if we buy from local instead of national firms.
• How much more = Local Premium
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Key Concept: Local Premium
• Local companies plow more of their revenue back into the local economy.– Keep profits here– Use local banks, accountants, printers– Advertise in local papers & radio– Buy goods & materials locally– Employ more people per $1M sales– Pay higher local taxes– Give more to charities & community
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Chicago (Andersonville)
• For every $100 in consumer spending at a local firm, $68 remains in local economy.
• For every $100 in consumer spending with a chain firm, $43 remains in local economy.
• For every square foot occupied by a local firm, local economic impact is $179.
• For every square foot occupied by a chain firm, local economic impact is $105.
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Calculating Local Premium
• Example: Chicago (Andersonville)•
• All retail ($68 - $43) / $43 = 58%
• Restaurants = 27%
• Retail stores = 63%
• Services = 90%
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San Francisco
• Effects of redirecting 10% of retail purchase to local merchants:– 1,300 new jobs– $72,000,000 new payroll dollars– $192,000,000 new economic activity
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Other Buy-Local Campaigns
• San Francisco• Chicago• Boulder, CO• Vermont• Barnstable, MA• Austin, TX• Tucson, AZ
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Best Businesses for Brevard
• Group A– National firm; HQ here; creates here, sells
everywhere – e.g., Harris Corp; Authentec
• Group B– Local firm; creates here, sells everywhere – e.g.,
Ocean Potion; Symetrics
• Group C– Local firm; buys elsewhere, sells everywhere –
e.g., Pelican Sales
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Neutral Businesses for Brevard
• Group D– Local firm; creates here, sells here – e.g.,
Surfin’ Turtle Bar & Grill; Galaxy Grille
• Group E– Local firm; buys elsewhere, sells here – e.g.,
Melbourne Beach Hardware
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Worst Businesses for Brevard
• Group F– National firm; HQ elsewhere; buys everywhere,
sells here – e.g., Target; Starbucks; Home Depot; Outback.
• Group G– On-line or mail-order firm; buys elsewhere,
sells elsewhere – e.g., J.C. Whitney, Amazon.com.
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A Note on Taxes & Ownership
• Best Buy• Wal-Mart• Head First Consulting• City Tropics Bistro
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Best Buy (192 & Evans)
• Square feet: 99,767• 2006 assessed value: $494,960• 2006 tax levy: $9,093• Tax per sq. ft.: $0.09• Owner’s location: Greeley, CO• Corporate HQ Minneapolis
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Wal-Mart (A1A & Eau Gallie)
• Square feet: 92,041• 2006 assessed value: $4,650,000• 2006 tax levy: $93,775• Tax per sq. ft.: $1.02• Owner’s location: B’ville, AR
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My House (Melbourne Beach)
• Square feet: 2,821• 2006 assessed value: $493,730• 2006 tax levy: $8,311• Tax per sq. ft.: $2.95• Owner’s location: Right here!
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City Tropics Bistro (5th Ave.)
• Square feet: 6,181• 2006 assessed value: $948,140• 2006 tax levy: $18,782• Tax per sq. ft.: $3.04• Owner’s location: Indialantic
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Local Premium: 4 Comparisons
• Restaurants• Commercial supplies• Computer & network services• Small technology companies
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Local vs. National Restaurants
• Galaxy Grille & Surfin’ Turtle– 75% of revenue re-spent in Brevard
• Outback Steakhouses– ~45% of revenue re-spent in Brevard
• Local Premium = ~65%
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Commercial Supplies
• Pelican Sales– 95% of gross margin spent in Brevard
• Grainger– ~50% of gross margin spent in Brevard
• Local Premium = ~90%
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Computer & Network Service
• Data Doctors– 70% of revenue re-spent in Brevard
• Firedog & Geek Squad– ~50% of revenue re-spent in Brevard
• Local Premium =~40%
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Small Technology Firms
• Harris subcontracts $1M to small local IT-services firm– ~$800,000 is re-spent here.
• Harris subcontracts $1M to small IT-service firm in Boston– $10,000 is re-spent here (on travel).
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Action at Four Levels
• Households & individuals
• Business owners
• Business community
• Government
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Households & Individual Consumers
• Change buying habits: Buy local !
• Encourage neighbors to do the same
• Pressure government to subsidize Groups A, B & C instead of Group F
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Individual Business Owners
• Recognize your stake in the success of every other Brevard business.
• Buy from each other.
• Refer business to each other.
• Market together.
• Make your business a great business.
• Compete on value & quality, not price.
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Business Community & Organizations
• Educate owners and residents.
• Launch a new joint organization to promote prosperity of everyone.
• Aggressively promote buy-from-each-other campaign.
• Lobby for government action to attract Groups A, B & C, instead of Group F
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Government & Quasi-government
• Recognize Brevard’s negative cash flow as a serious social & economic problem.
• Subsidize positive-flow companies, not negative-flow companies.
• Promote (and live) the buy-local principle.
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