CW-BRE Study Guide Flashcards
How do BRE programs assist businesses?
1) Keep them from relocating
2) Help them survive economic difficulty
3) Assist with expansions that add new jobs
4) Increase competitiveness in wider marketplace
Define a BRE program
Involves partnerships of:
-public
-business
-community
leadership that continuously assesses the:
-existing industrial base
-physical, locational, technological, and human
resource needs of individual companies
What data is obtained to maintain a picture of strengths and weaknesses of the local economy?
1) Competitive strengths and weaknesses of the area as a business location
2) Strength of local economy (#of expansions, new investments)
3) Areas of interest or concern used to formulate public policy, enhance development efforts, or improve business climate
List 5 impacts of a business closing or relocating
1) eliminates jobs
2) reduces tax base
3) lowers surrounding property values
4) contributes to blight or decline
5) lowers community image/outlook
List 4 impacts of a business expansion
1) creates or retains jobs
2) increases tax base
3) increases local property values
4) improves community image/outlook
Why is BRE a core program?
1) 65-80% of new jobs are created by existing businesses
2) helps market the community to new companies
3) emerged during the recession in 1970’s-80’s
List 6 successful BRE factors for the EDO
1) industry knowledge
2) local firm knowledge
3) professional service
4) results oriented
5) long-term focus of overall business climate and problem solving
6) Coordinate services between and among agencies and programs
What is the role of the ED practitioner in BRE programs?
1) direct provider of financial and technical assistance
2) broker between companies and resources
3) advocate for business concerns relating to government policy
Who are the stakeholders in BRE?
1) business community
2) major employers
3) existing company employees
4) utility companies
What are 6 unique offerings of utility companies for BRE?
1) discounted rates
2) site info
3) energy audits
4) revolving loan funds/ grants
5) low cost financing
6) export assistance
List nine areas to examine in assessing a community’s strengths and weaknesses
1) labor force
2) access to markets
3) transportation
4) educational infrastructure
5) site availability
6) tax rates
7) utility costs and availability
8) quality of life
9) business climate
What factors should be considered when assessing opportunities and threats?
1) structural changes in the economy
2) demographic changes in the community
3) technological changes
List 7 important factors that a BRE SWOT Analysis should reveal
1) outlook- age and growth trends of key industries
2) technology- how will advances impact local industries
3) legal/regulatory changes- beneficial or harmful to key industries
4) large employers- location of headquarters, trends
5) economic trends- growth/recession/international
6) competitors- attraction to other locations
7) other concerns- industry health/consolidation trends/leadership change
Sources of firms to target for BRE programs
1) Chamber of Commerce/EDO Listings
2) Business license info
3) Business associations
4) Agencies (SBA, SEC)
5) Business publications and Directories
What are the two primary purposes of a visitation and surveying program?
1) early warning system to alert officials of plans/problems/concerns of local businesses
2) aggregates info into a database for local economy awareness
List the 5 models of business visitation and surveying programs
1) mail surveys
2) in-person surveys via volunteers
3) in-person surveys via ED staff
4) combined mail and in-person surveys
5) email/web-based surveys
When are mail surveys most appropriate
When the primary objective is:
-to get a general sense of the business community’s level of satisfaction with the community
-to gauge overall health of local businesses
-follow up after larger in-person survey efforts
What are the sequence of events to organize a volunteer program?
1) elected official support for visibility and credibility
2) appoint task force chaired by prominent private sector leader
3) identify firms to survey
4) send letter of introduction from elected officials three weeks prior to kick-off
5) hold training for volunteers
6) hold kick-off event to promote and heighten awareness of program
What are the sequence of events to organize an ED staff administered program?
1) obtain elected official support
2) identify firms to survey
3) schedule blocks of interviews (geographical regions)
4) letter of introduction from elected official 2 weeks prior to interviews w/ copy of survey
5) follow up phone call one week later to set appointment
List criteria to be used in developing a list of targeted companies
1) company size - either employee count or revenue sales
2) industrial sector
3) geographic region
4) ownership (local-based or headquartered elsewhere)
Explain an ideal mail survey
1) one page
2) 2-3 focus areas
Explain an ideal site visit questionnaire
1) confidentiality issues addressed upfront
2) tested for time constraints, ambiguity and validity
3) basic info obtained ahead of time (name, principals, parent/subsidiaries, SIC/NAICS codes, age, current and historic # of employees, own/lease facility)
4) specific focus areas
List and explain specific focus areas for site visit surveys
1) firm background (suppliers, customers, revenue, growth potential, product lines, employment
2) business climate (location, rating of community)
3) Labor and training needs (skill levels required, average wages, education levels, unions, residency, turnover, absenteeism, employment pool)
4) marketing and trade (are sales in: various jurisdictions, exports, domestic sales, government sales/contracts)
5) financing needs (problems securing capital, areas where additional capital needed, sources of capital/credit)
6) regulatory issues (relationships with agencies, business friendly regulatory climate, complexities, costs, time, guidance)
7) barriers to growth (size and condition of facility, location, workforce, regulations, taxes, labor costs, transportation, crime, energy costs)
8) satisfaction w/ public services and facilities (schools, higher education, parks, culture, police and fire, water, sewer, solid waste)
9) local business assistance (utilization and satisfaction with services)
List the elements of a training session agenda for in-person surveys
1) welcome and introduction by task force leader and elected official
2) overview of program and confidentiality (goals/objectives/services)
3) survey form (step-by-step walk through)
4) interviewing tips (punctuality/dress/professionalism)
5) role playing
6) conclusion
Explain the various stages of survey follow-up
1) immediate (w/in 2 days, determine red flags)
2) short-term (w/in 2weeks, thank you/compile results/create files)
3) medium-term (w/in 4 weeks/ internal and external responses to requests)
4) long-term (w/in 3-4 months/ update firms on progress dealing with issues
List the top 10 red flags for an at-risk firm
1) declining sales/employment
2) larger non-local corporate ownership
3) recent ownership change
4) expiring leases
5) competition in same service/ product field
6) negative community attitudes
7) unbearable regulatory burdens
8) union contract expirations
9) expanding employment/sales
10) facility/ site expansion plans
What are some early warning signals that a company may be at risk?
1) obsolete facility, product lines, or technology
2) location problem in neighborhood
3) contentious labor relations
4) lack of export or international focus
5) no succession plan (family-owned businesses)
6) relocation of top management to another location
8) loss of supplier/customer contracts
Define cluster-based economic development
an approach to economic growth that builds upon existing concentrations of competing, complementary, and interdependent firms within industrial sectors.
How can EDO’s support industrial clusters?
1) regional planning
2) business networks (coordinate all relevant EDO’s)
Define business networks
a network of similar firms:
-w/in industrial segments
-w/ contractual relationships
-co-located in certain neighborhoods or industrial areas having mutual interests which compels them to engage
List and describe three structures of business netoworks
1) formal networks 0 offer a mechanism to aggregate and project the voice of the cluster, provide insight into an industry’s needs
2) horizontal structure network - cross sectoral (common customers, tech, distribution)
3) vertical structure network - single sector, interrelated for specific purposes
List 3 common project categories for networks
1) input (purchasing, training, R&D)
2) processing (manufacturing, technology, TQM)
3) output (new products/services, commercialization, export)
List 3 common scenarios regarding site opportunities that may lead to a firms relocation decision
1) up-valuing in land use (manufacturing no longer represents highest and best use of location)
2) devaluing of location (increased crime, decreased quality of services, deteriorated infrastructure)
3) sufficient land for expansion is unavailable at current location
List 5 common remedies used to facilitate expansion and retention efforts
1) manufacturing/industrial zone designation
2) industrial park development
3) eminent domain
4) identification of available sites
5) site selection data standards
List & Describe 5 types of venture capital
1) state venture capital programs - typically limited to small in-state businesses in hi-tech industries w/ strong growth potential
2) pension fund set asides - earmark of state funds from tax revenues, bonds, lottery receipts, or portions of public employee pension funds
3) tax incentives - credits for angel investors or CAPCOs
4) angel networks - personal investment for 3-5 yrs
5) capital networks - brokering service matching entrepreneurs and investors
Define CAPCO
certified capital companies were started in Louisiana. Insurance companies receive tax credits of 100-120% in certified capital companies that provide venture capital investments.
List the 4 steps in brokering sources of venture capital
1) know capital providers
2) develop mechanism to identify candidates
3) link entrepreneurs with sources of technical assistance
4) the entrepreneur closes the deal
List the elements in a BRE Technical Assistance Program
1) management (operations, inventory, payroll, etc.)
2) marketing/sales (new customers/exporting/etc.)
3) financial (start-up/growth/credit lines/etc.)
4) workforce development (recruiting/training)
5) regulatory and policy (permitting/licensing/safety, etc.)
6) real estate (expansion/relocation)
List 5 steps in developing a technical assistance program
1) determine targeted companies (based on employment, regional export, growth, industry trends, need)
2) develop standards for participating companies (greatest impact, based on size, ownership, financial condition, growth opportunities)
3) define scope of services (provide recommendations only, or also implementation)
4) secure consulting services (external contracts or internal expertise)
5) establish pricing policies (establishes sense of ownership)
Explain the role of Small Business Development Centers
1) administered by SBA, SBDC’s provide financial, marketing, production, organization, engineering assistance, feasibility studies, and other serves to established and prospective small business owners
2) also offers specialized programs such as international trade, technical, procurement, and venture capital formation assistance
Define technology transfer
steps in the innovation process, ranging from R&D to more specific applied research, product commercialization, or the diffusion and deployment of new products and processes for application by the users of technology.
What are the 2 basic purposes of technology transfer?
1) deployment - to bring new or under-used technologies to existing companies to improve efficiency, productivity, or competitiveness; or to enable them to take on new product lines and enter new markets
2) commercialization - to place new products and processes in the commercial marketplace through new or existing companies or strategic partnerships built for that purpose.
Explain NIST’s (National Institute of Standards & Technology) MEP’s (Manufacturing Extension Partnership)
MEP - primary mission is to conduct evaluations and assessments to help companies identify and solve problems in areas such as planning, technology, quality improvement, modernization, and training.
List the areas for PA’s Industrial Resource Centers (IRC)
1) manufacturing strategy
2) quality management
3) technology improvement
4) business planning
5) workplace development
Define the Workforce Investment Act (WIA)
-Established in 1998
-to provide a framework
-for a unique national workforce preparation and employment system
-designed to meet the needs of the nation’s businesses, job seekers, and those who want to further their careers.
List the elements of WIA Title I
1) training and employment programs to be designed and managed locally
2) customers must be able to conveniently access needed services at a single location in their neighborhoods
3) customers should have choices in who provides which training services to control their own career development programs
4) customers have the right to access success rates of training providers/programs
5) businesses will provide information, leadership, and play an active role in ensuring the system adequately prepares people for jobs
Explain the primary purposes of the five Titles of WIA
Title I: authorized WIS, established state WIB’s, directed 5-year state strategic plans for workforce. Also youth councils, one-stop delivery systems, career centers.
Title II: Reauthorized adult ed and literacy programs
Title III: Amended Wagner-Peyser Act to require that job service activities become part of one-stop system, established national employment statistics initiative, established temporary 21st Century Workforce Commission to study IT workforce issues
Title IV: Reauthorized rehabilitation act programs linked to state and local systems
Title V: general provisions for state unified plans relating to WD programs, incentive grants, adult ed act, and perkins vocational ed act
Explain benefits of a workforce development focus
1) upgraded community workforce skills largely remain in the community
2) offers lower-cost training alternatives providing better qualified employment pool
3) well-trained workforce increases a community’s competitive advantage
List options for assisting firms with permitting and licensing
1) one-stop permitting centers
2) technical assistance
3) training of regulatory staff
4) case management
5) ombudsman
6) assistance center
7) restructuring redevelopment codes
How can incentive programs be tailored to support BRE?
1) sliding scale job creation/investment requirements (rather than fixed percentage in employment or investment)
2) non-competition policies (prohibit granting incentives to incoming competing firm
General Obligation Bonds
-backed by full faith and credit of issuing government entity
-exempt from federal income tax
-used to finance public purpose projects (schools, bridges, public facilities and infrastructure improvement facilities)
-project revenues are pledged to repay principal and interest
Tax exemption on land and capital improvements
entices companies to construct or improve land and capital equipment
tax exemption on equipment and machinery
exemptions on property, sales, use, franchise and or state income taxes on new building materials, machinery, and equipment
tax exemption on manufacturer inventory
offers exemptions on unexpected inventory surplus due to increased production
tax exemption on goods-in-transit inventories
often applies only to shipments between same corporate entities in different states
sales/ use tax exemption
provided for certain industries or goods depending on circumstances and economic importance
tax exemption on raw materials used in manufacturing
attempts to lower cost of manufacturing by exempting sales/use taxes on unprocessed goods such as utilities
tax exemption on corporate/personal income
provides the company with reduced costs and possibly reimbursement of all employees income taxes back to the company for future infrastructure development
tax exemption on excise fees
exemptions from non-property taxes such as licensing and federal estate fees, or taxes on manufacturing, sale or consumption of a product within a jurisdiction
tax increment financing
self-financing technique used to support infrastructure projects.
Within a designated TIF district, the assessed valuation of real estate is frozen at the point just before the project begins. The increase in resulting tax revenues from the new development above that level is used to pay off the debt incurred by the development.
enterprise zones
designated areas (within communities that are facing economic distress) to provide needed employment and activity
renewal communities
eliminate regulatory barriers that keep small businesses from growing or starting in distressed areas
-include 0% capital gains tax for sale of qualifying assets
-15% wage credit for first $10K qualifying wages
-commercial revitalization deduction allowing deduction of either 50% of qualifying expenditures or 100% ratably over 10-yr period
-additional $35K section 179 expensing
-expanded WOTC
tax incentives for job creation in areas of high unemployment
incentives for creating jobs in high unemployment areas as designated by the state
tax abatement
reduction or elimination of certain taxes granted for a specific time
tax credits for creation of jobs
generally based on a company’s total withholding tax liability for all employees at a new facility
tax credits for use of specified products and industries
provided to encourage purchases from important in-state industries
accelerated depreciation of industrial equipment
compensates business owners for the rapid reduction in the value of industrial equipment in the first few years of the property’s life
foreign trade zones
1) created by federal government in 1930’s to facilitate trade and increase global competitiveness of US-based companies by providing tax exemption on goods-in-transit and manufacturers’ inventory
2) foreign and domestic merchandise is treated as being outside US customs territory boundaries
3) FTZ’s improve cash flow by:
-lowering inventory costs
-deferring reducing or eliminating US customs duties
-distributing savings
-electing preferential duty rates
tax credits for day care facilities
companies that build day care facilities are eligible for refunds on sales and use taxes for the construction materials and furnishings of the facility or to companies who purchase day care services for their employees.
List common criteria used in incentive decisions
1) number of jobs created
2) quality of jobs
3) minimum investment requirement
4) reporting requirements for environmental, OSHA, and labor laws and regulations
5) “But for” determinations
6) corporate citizenship
List common performance-based management tools
1) claw-backs - sanction applied against a company that fails to achieve performance goals in incentive agreement
2) calibrations - tool for fine-tuning terms of an incentive package at some future point through variable interest rates on loans, conversion of loan assistance to grants, or sliding scale repayment terms
3) balancing accountability with a pro-business climate
List various utilities-based assistance
1) technical assistance
2) financial incentives
3) demand side management
