Gardening on Main Street: Growing and Tending to Small Businesses in Rural Communities

Growing a business has often been compared to tending a garden. In a garden, you need to have the right climate, along with the nutrients plants need to thrive and the proper amount of sun, water and fertilizer.

When “growing” small businesses, communities need to make sure they have the right mix of nutrients—or components—to support business growth and development. These include a trainable workforce, financial resources, business services, space, city infrastructure and business networks.

When a business “garden” has an imbalance in these components, its growth can be stifled. Unhappy business owners will relocate to a community that will help them flourish, and new business owners looking for a location will avoid the area altogether. A balanced business climate needs to have a diverse blend of businesses and business services that complement each other and work together. Businesses tend to thrive in communities where they have access to financial institutions and alternative funding sources, networks, educational institutions and city government.

Assessing the Climate in a Business Garden

The Missouri Rural Entrepreneurship Initiative at the University of Missouri-Columbia’s Rural Policy Research Institute found that growing a small business in a rural setting is vastly different from growing a small business in an urban setting. Rural communities often are missing components that are vital to business development and growth. They also found that, by measuring a community’s strengths and weaknesses in relation to 10 components, they could assess whether the climate in the community was conducive to business growth.

The initiative team retained the Community Policy Analysis Center in Columbia, Mo., to develop a guidebook and refine a survey that rural communities could use to assess their small business climate. The result was Growing Entrepreneurs from the Ground Up. (See related story: “The Survey.”) Although this survey was originally created as a self-assessment tool, some communities found that inviting an outside party into their community to conduct the survey was the best way to get to the heart of many issues.

One Town's Mission To Revitalize Main Street

Over the past 30 years, many rural communities watched as their “Main Street” changed from a retail hub to a vacant reminder of better days. Consumers who had once patronized Main Street shops now chose the convenience of nearby malls and supercenters over smaller establishments in the heart of town.

Starved for business, retail establishments closed, empty storefront windows displayed “For Rent” signs and downtown lost the magic it once held. The problems on Main Street were soon felt all over town as community leaders struggled to replace lost income from sales taxes that had dried up.

In Palmyra, a small rural community in northeast Missouri, changes on Main Street did not go unnoticed by local business owner Irene Meyers and a group of residents and fellow business people. They realized they needed to organize to reverse the drought that was hurting the downtown business community. Meyers began researching ways to rebuild and in 1996, with the help of Missouri’s Department of Economic Development, the Palmyra Area Community Betterment (PACB) association was organized.

PACB’s mission was to bring together resources that would improve the quality of life and economic conditions in Palmyra. The hard work of rebuilding Main Street by attracting new business owners began.

The Missouri Community Assessment and Planning Process (MoCAPP) program helped by conducting an assessment of Palmyra and finding grant money for community improvement projects. In 2000, PACB efforts paid off when it launched a project that added new lights and park benches to the courthouse square. However, along with the success of the project came the realization that they needed to refocus and create a comprehensive revitalization and economic development plan that included engaging business owners.

While attending a regional workshop on community development, Meyers heard representatives from the Federal Reserve Bank of St. Louis talk about the Growing Entrepreneurs from the Ground Up survey. She realized that Palmyra could benefit from inviting the Fed to survey the town’s business owners.

Palmyra’s survey began in October of 2007 and, by December, PACB had a copy of the final report. Meyers invited the Fed to present its findings at the community’s annual meeting.

More than 100 citizens attended the meeting to hear the findings from the Fed’s survey and MoCAPP’s updates to its assessment. After the reports, attendees were split into work groups to discuss how to approach the issues. Everyone had the opportunity to vote for the goals they wanted the community to pursue.

This collaborative effort created a list of 15 community development goals, with six coming from the Growing Entrepreneurs from the Ground Up report. Recommendations included hiring a professional planner/developer, redesigning curbs and sidewalks for safety and aesthetics, and establishing a downtown historic district.

PACB quickly found that fulfilling the goals was going to take a lot of work and money. The goal that received the most votes was to hire a professional planner/developer to focus on community and economic development. However, there was no city or PACB funding available for the position.

PACB members didn’t let that stop them. Using a recommendation from the survey, they did some intensive research and developed an innovative initiative to raise money. Calling its initiative “The Community Investment Plan,” PACB asked residents to pledge one dollar a week, or $52 dollars annually, to help Palmyra achieve its development goals.

To promote the fund-raising drive, PACB held a community meeting to outline the plan, the local newspaper ran a story about the meeting, and the plan and the results of the Growing Entrepreneurs from the Ground Up survey were posted on www.showmepalmyra.com, the town’s web site. Money soon started coming in, but surprisingly, not just from residents. Some of the first pledges came from former residents who still care about the community.

Meyers feels good about the interest and changes in the climate on Main Street. The plan lets everyone feel they can get involved, she said. “When folks ask me how much money I think we can raise, I tell them as much as we need to make our goals realities. It’s easy to say that we have a lot of work ahead of us, but now we have a plan,” Meyers said.

PACB originally hoped to hire a community planner within a year, but the recent downturn in the economy has slowed their efforts. What it hasn’t hurt is their enthusiasm for the task ahead of them.

“The Growing Entrepreneurs report is what gave us the push we needed. It re-energized our base and gave us food for thought and discussion. We’ll be ready when the economy starts flowing again,” Meyers said.

Loren Graham, Palmyra’s mayor, also said he has been pleased with outcomes of the report.

“When citizens become interested in what’s going on, and I’m able to fill board positions that have been vacant for a long time, I’d call that success,” Graham said.

Jean Morisseau-Kuni is a community development specialist at the Federal Reserve Bank of St. Louis.