What Businesses are
Working in Wisconsin’s
Downtowns?
Businesses operating in Wisconsin’s Downtown’s
(2002-2010)
By: JD Milburn, Downtown Development Specialist
Ever wonder what businesses work in Wisconsin’s downtowns
which ones close the most, which ones create the most jobs?
This presentation provides an analysis of 8 years of data from
those on the front lines. Wisconsin Main Street Executive
Directors!
Wisconsin Main Street presents 8 years of economic
operating data to refine your local efforts.
Wisconsin Main Street Community Demographics
• Population
Populations run from 764 to 102,000 when considering the
community or one (1) mile radius of the two (2) metro designated
neighborhoods. The average population is 7,400 and the median
population is 10,000 for the designated areas.
• Budgets:
The average budget of the designated areas were $138,922 with
the median being $100,965. Gross budgets ranged from $400,000
to $30,000. The program requires organizations to employ a fulltime executive director when the population base is 5,000 or
greater, and allows for part-time director when the population is
below 5,000.
Wisconsin Main Street Community Demographics (Cont)
• Legal status
81.82% hold Internal Revenue Service (IRS) tax exempt status
of 501 (C )(3) “Charitable Organization “,
3.03% 501 (C )(4) “Civic League”,
9.09% 501 (C )(6) “Business League” and
6.06% two (2) local Government Agency “Business
Improvement District” (BID) Status.
62% Have a BID
Closings
As we all know business closing can have many negative economic and
social affects on an area.
Some of those may be:
•
•
•
•
•
•
•
•
Lost area sales
Lost area necessity goods
Lost area necessity services
Lost bank and investor capital
Lost payroll spending impact
Lost real estate value
Lost taxes
Perhaps higher crime rates?
•
So lets look at the types of businesses that are closing, and estimate some
economic impacts
Closings
Business types that closed the most in Wisconsin Downtowns
1.
2.
3.
4.
5.
81 appliance and home electronics
70 eating places
42 apparel
39 Gift stores
33 drinking places
Closing Business type by job impact
1. 458 eating places
2.
3.
4.
5.
98 drinking places
88 apparel
82 Gift stores
78 other retail
Closings so what?
What has the area lost per store
Appliance stores
Average sales
Average payroll
Average real estate size
Real estate taxes
$1,988,000
$217,885
4,000
$6,160
Closings so what?
What have we lost as a state
Appliance stores
Sales
$161,028,000
Payroll
$17,648,654
Real estate vacancy
Real estate taxes
324,000
$498,960
Closings so what?
Job impact
Eating Places
Lost Jobs
Average payroll
Economic loss
458
$10,539
$4,826,987
Business types sold
Sales can indicate many things.
Some of those may be:
•
•
•
•
•
An enhanced economic area, in which owners sellout and invest funds into
new ventures.
An area in which transition is happening as business owners reach
retirement age.
An area experiencing economic stress, in which selling the business is the
only way out of a potential liquidation
A type of business that is becoming a casualty of a category killer or Big
Box competition
So lets look some of the types of businesses that are selling and think
about our own local situations.
Business Types Sold
Business types that sold the most in Wisconsin Downtowns
1. 14 eating places
2. 7 other retail
3. 5 drinking places
Sold business type by job impact
1. 52 eating places
2. 29 drinking places
3. 24 laundries & cleaners
Sold businesses so what?
Local area economic influence
Eating places
Average sales
Average payroll
Average real estate size
Real estate taxes
$702,875
200,238
4,900
$7,987
Sold businesses so what?
State economic influence
Eating places
Sales
$9,840,250
Payroll
$2,803,326
Real estate vacancy
Real estate taxes
68,600
$105,644
Sold businesses so what?
State Job impact
Eating Places
Lost Jobs
52
Average payroll
$10,539
Economic loss
$548,042
Expansions
Expansion into the area can indicate many things.
Some of those may be:
•
•
•
•
•
An enhanced economic area, in which owners expand product offerings
An enhanced area, in which owners purchase additional real estate
An enhanced area, in which owners pursue additional markets, or acquire
additional businesses.
In most cases expansion is a sign of local economic health
So lets look some of the types of businesses that are expanding and
evaluate our own local situations.
Business Expansion Types
Business types that expanded the most in Wisconsin Downtowns
1. 26 eating places
2. 18 professional services
3. 13 gift stores
Expanded business type by job impact
1. 103 banks/credit unions
2. 86 eating places
3. 71 miscellaneous personal services
Expanding businesses so what?
Local area economic influence
Eating places
Average sales
Average payroll
Average real estate size
Real estate taxes
$702,875
200,238
4,900
$7,987
Expanding businesses so what?
State economic influence
Eating places
Sales
$18,274,750
Payroll
$5,206,177
Real estate vacancy
Real estate taxes
127,400
$196,196
Expanding businesses so what?
Job impact
Banks/Credit Unions
Expanded jobs
103
Average payroll
$41,635
Expansion gain
$4,288,422
Reductions
Reductions in the area can indicate many things.
Some of those may be:
•
•
•
•
A product that has experienced obsolescence and so the survival strategy
is to reduce the employees and or real estate footprint
Reductions also happen when a firm is dying a slow death
Reductions are warning signs to help the owner using retention strategies
So lets look some of the types of businesses that are reducing and
evaluate our own local situations.
Business Reduction Types
Business types that reduced the most in Wisconsin Downtowns
1.
2.
3.
4 eating places
4 miscellaneous professional services
2 apparel
Reduced job numbers by business type
1. 50 manufacturing
2. 22 banks/credit unions
3. 9 eating places
Business reduction so what?
Local area economic influence
Eating places
Average sales
Average payroll
Average real estate size
Real estate taxes
$702,875
200,238
4,900
$7,987
Business reduction so what?
State economic influence
Eating places
Sales
Payroll
Real estate vacancy
Real estate taxes
$2,811,500
$800,950
19,600
$30,184
Business reduction so what?
Job impact
Manufacturing
Reduction jobs
Average payroll
Reduction loss
50
$44,814
$2,240,720
Relocations
Relocations from the area can indicate many things.
Some of those may be:
•
•
•
•
When a firm has experienced growth so large that a large single purpose
headquarters has to be built. This can be experienced both ways and
some firms have relocated their headquarters into downtowns
Relocations happen when an area experiences business cycles similar to
the maturity of its business mix.
Relocations happen when cost structures change
So lets look some of the types of businesses that are relocating and
evaluate our own local situations.
Business Relocation Types
Business types that reduced the most in Wisconsin Downtowns
1.
2.
3.
52 miscellaneous professional services
37 other retail
33 miscellaneous personal services
Reduced job numbers by business type
1. 426 Insurance agents
2. 307 miscellaneous professional services
3. 243 eating places
Business relocations so what?
Local area economic influence
Misc. Professional services
Average sales
Average payroll
Average real estate size
Real estate taxes
$1,138,524
44,479
2,250
$5,670
Business relocations so what?
State economic influence
Misc. Professional services
Sales
$59,203,253
Payroll
$2,312,902
Real estate
Real estate taxes
117,000
$294,840
Business relocations so what?
Job impact
Insurance agents/brokers
Relocated jobs
426
Average payroll
$46,829
Relocation gain
$19,949,279
Business starts
Business starts in an area can indicate many things.
Some of those may be:
•
•
•
•
•
Healthy attractive business environment
Business friendly area, community, politics
Capital sources.
Good real estate value compared to business revenues
Coexisting business in the area, that encourage their friends to open a
supporting business.
•
So lets look some of the types of businesses that are starting and evaluate
our own local situations.
Business starts Types
Business types that reduced the most in Wisconsin Downtowns
1.
2.
3.
93 eating places
62 other retail
33 miscellaneous personal services
Reduced job numbers by business type
1. 1,112 eating places
2. 307 other retail
3. 232 miscellaneous professional services
Business starts so what?
Local area economic influence
Eating places
Average sales
Average payroll
Average real estate size
Real estate taxes
$702,875
200,238
4,900
$7,987
Business starts so what?
State economic influence
Eating places
Sales
$65,367,375
Payroll
$18,622,094
Real estate vacancy
Real estate taxes
455,700
$701,778
Business starts so what?
Job impact
Eating Places
Gained Jobs
Average payroll
Economic gain
1,112
$10,539
$11,719,672
Strategies/Take away?
•Eating places have high start up rates, high job impacts, but experience
larger amounts of closings. Each community should have an active
restaurant development, retention strategy!
•Financial institutions have high job impacts and are purchasing real estate in
downtowns. Actively working with this sector as a development strategy is an
effective strategy.
•Light small component manufacturing should be a strategy. Look for large
manufacturing plants, and try to locate small value added suppliers in certain
areas of downtowns.
•Professional and personal services. This area has large employment and
income impacts. Look at your mix and try to fill in the upper areas of
properties with these types of businesses. A balanced and market
sustainability driven effort is the key to a downtown area.
Data sources?
•Wisconsin Main Street reporting database.
•InfoUSA
•Dollars and Cents of Shopping Centers SCORE 2008 (ICSC
& ULI)
•US 2007 Economic Census