Entrepreneurship key to reviving local economy
From Buffalo Rising Magazine, January '07. Bob Franke pictured above.
Justin Azzarella is really good at keeping a secret. Azzazarella, executive director of the Elmwood Village Association, knows about several new businesses that are coming to the Elmwood area in 2007, but he’s not saying what, he’s not saying whom, and he’s not saying where exactly.
“I can say I know of four businesses that will be opening in the area that will fill a niche -- things that you would have to go to the suburbs to find,” he said. “I think we’ll probably see them opening up in the spring.”
Four new businesses opening their doors in a neighborhood that saw the opening of 28 new businesses in 2006? Not bad numbers, even for Elmwood. But this phenomenon isn’t limited to the Elmwood area. New businesses seem to be sprouting up throughout the city.
From Dennis Brinkworth’s new coffee bistro in the Cobblestone district to the new west side greenhouse, local entrepreneurs are transforming the area economy. Business, small business, that is, is booming in Buffalo.
Franklin J. Sciortino, District Director of the United States Small Business Administration, said small business traditionally accounts for most of the new business activity in the area. Last year, the local SBA, which serves 14 counties in Western New York, awarded 1500 loans worth a total of $250 million to new entrepreneurs.
“Were very optimistic,” he said. “We just came off a great year and we’re ecstatic.”
The recent news that Bass Pro Shop will most likely scuttle its plans to build a store here underscores the importance of more small business development, Sciortino said.
“Ninety-eight percent of all businesses are small,” he said. “Eighty percent of all businesses in New York State employ 10 or fewer people. Small is the engine that drives the local economy.”
Sciortino said he was sorry to hear that Bass Pro’s plans looked less likely than ever to come to fruition, but said he feels that leaders and the community need to understand that maybe bigger isn’t better.
“That’s too bad about Bass Pro, but if you look at the local economy, it’s the small businesses that are creating most of the jobs,” he said. “Not that we wouldn’t like to have (Bass Pro), but most of the new jobs that are created here come from small business.”
The idea of small business development as a means to revitalize the local economy seems to be germinating in several neighborhoods throughout the city.
Bob Franke (pictured above), director of the Grant-Ferry Association, said a number of new businesses will be opening in his neighborhood in 2007, not the least of which is the well-publicized greenhouse and nursery project (see Anna Miller’s story about the greenhouse in this issue).
“This is a big deal -- it may the only greenhouse/nursery within the city limits,’’ he said. “It’s taking something that was really blighted for a long time and bringing it back to respectability.”
Franke said he is excited about a number of small business initiatives in the Grant-Ferry area, including a new doctor’s office, some mixed-use development of blighted buildings, and several new retail and service businesses started by Somali immigrants. Somali Star, a small food stand on Grant Street, opened last year and has shown early signs of success, and the former Zarcone meat market is slated to become a Somali meat market.
“There’s 4,200 Somalis who have moved to Buffalo recently,” Franke said. “It’s an important factor in the same way that when all the Italians came here and started all those businesses – you see one group fade and another comes in.”
Franke said one of the keys to incubating small business in his neighborhood is to make it easier for neighborhood residents to start businesses. To that end, he said he hopes to help establish a merchants market that would be affordable for entrepreneurs with modest budgets.
“It would be almost like a flea market of sorts,” he said. “Like the Broadway Market or the St. Lawrence Market in Toronto, where you don’t need a storefront and some of the up front expenses and work is taken care of. We’re hoping to get that off the ground next year. We have a building in mind.”
Franke said he envisions an ethnic marketplace, with vendors who specialize in unique wares and foods, including a fresh-fish market, a real possibility for ’07.
“That’s why I’m so optimistic about 2007,” he said. “ I think you’re going to see Grant emerge as an international marketplace, a place where you can get almost anything you want. What a boon to the community that would be.”
How will Richard Tobe, as Commissioner of Business Development, et al, address this phenomenon? Is there a plan that recognizes the significant contribution of small businesses that has been developed by this new department in City Hall, or do we continue with BERC and what has been used previously?
It is not the small businesses that are creating most of the jobs it is the large ones, at least locally. If you look into the DOL detail you will see that over the past two years and you will see that the area with the largest growth was Financial services/banking, This included nearly 2,000 jobs at Geico and over 600 at M&T Bank. That's 2,600 jobs in two years, Can you name a NET of 260 employers with an average 10 employees each that opened during that same time period? I think not. If they had there would have the Buffalo area would have had a net gain of jobs last year and not a net loss, albeit a small net loss of only 300 jobs
This is great news and I am happy that this corridor is doing well.
On the other hand, I'm continually depressed by metro buffalo's obsession with retail business and in thinking that the amount of retail is some indicator of success in an area. Folks, retail is like icing on the cake, it's not the main course, it's not the kind of entrepreneurship that creates good paying jobs and careers and hope for people. I always thought Buffalo had a great mix of independent retail and restaurants but I left town because retail and restaurants, contrary to people's popular belief, do not mean that a city is sustainable and healthy and able to provide good jobs for its residents.
I'm sure people will jump on my back here, but I'm just trying to get people to remember all the other kinds of entrepreneurship and jobs that could be brought in if people's awareness was raised and the community was more mobilized to focus on the real high paying jobs out there.
Again good news for Elmwood and lets also focus on the variety of businesses that could come in and support the retail and restaurants, with great career-oriented work and salaries.
Once again, Econ101 is proving him or herself to be the smartest person in the room. I've really enjoyed your posts, and agree with those sentiments.
People in Buffalo don't need jobs. Jobs are everywhere. People in Buffalo need careers, and their is a really big difference between the two.
Restaurants and retail shops on Elmwood are great for quality of life for the area residents, but I don't buy for sone second that 10 serving jobs is good news for the economy.
retail is like the airport, the sabres, and many other Buffalo amenities...in the sense that they would not exist if it werent for Canadians crossing the bridge and patronizing Buffalo.
Out Buffalo and WNY economy doesnt have the money or the jobs for as much retail and entertainment and infrastructure as we have so its time Buffalonians got off the retail train and focussed on real businesses that do more than recycle local money but actually bring money INTO our community from the region, the nation and the world.
Lou: Did you know that according to the Federal Bureau of Labor Statistic that Erie County is in the top 5% of counties nationally of all counties in per capita as well as per household income?
Sally-
Bullshit.
Provide a link.
"...real businesses that do more than recycle local money but actually bring money INTO our community from the region, the nation and the world."
ALL of the above comments are pretty spot-on. Unfortunately, in Buffalo when a new business opens, a similar existing business usually closes.
WHY?
Buffalo's STAGNANT MONEY-PIE!
A note to the selfish & greedy "geniuses" that decided the BED TAX money was theirs for the taking instead of allowing the CVB to use it to market Buffalo & WNY as was the intended purpose of the tax.....
TOURISM is a win/win for an area. NEW money in and no legacy or social service costs.
It's amazing how satisfied the "geniuses" are just stealing "chump change" when they could be stealing REAL MONEY if the area was properly developed!
Sorry for the typo "calling Sally" I meant 15%, but you are the one that is full of it if you think we live in a poor county relative to the rest of the country
http://www.bizjournals.com/buffalo/stories/2002/07/08/story2.html
Tourism is a win but a relatively small one and is not the big deal people imply it is.
How many "career" type jobs will that create in Buffalo even if the CVB budget was doubled, tripled, or quadrupled? (and by the way, they'd still never admit it was enough funding - they'll always be begging for more, until the end of time!)
Some such jobs could be created, I'll admit (hotel mgr, stuff like that), but mostly it'd be service sector jobs well below a living wage. Great for part time jobs that students need, but it's not ever gonna be huge in Buffalo. How many carrer type jobs do tourism to old Frank Lloyd Wright houses create in the city that has the most of them - Pittsburgh or whatever?
Tourism would not create thousands (or possiblly not even many hundreds) of good solid middle class jobs/careers in Buffalo.
Dozens perhaps, maybe 100 or 200 or so if we somehow have a huge increase of people coming to see the canal terminus or FLW houses.
But we have lost over 200,000 in population in the city alone, as well as the jobs that supported those people.
Tourism is a fine little nice thing, but it's impact to Buffalo is exaggerated by people who have a very personal interest (such as the CVB execs) or people who just are wishful thinkers.
The stuff written by Econ 101 gets much more to the important issues.
Yeah, we need some entrepreneuers to engage in some startups that actually produce goods and services that bring in outside business.
Personally, i'd love to invest in some homegrown businesses with room to grow
Marilyn, Econ 101, Transplant and ShopItAll... good points.
Charlie, a great read.
Thanks.
what's stopping you Ike?
Sally-
I'll eat half a crow, because honestly I probably would have responded the same way even with 15%.
But after reading the article, that statistc is a little bit misleading. The 85 percentile is good for 380th place or something like that?
It would make sense that the bulk of wealth would be concentrated around cities or are at least urban counties, which means that almost every metro area in the country has a county placed abover Erie.
When you consider that Niagara county was in 700 and something place, and that constitutes another major part of the MSA, it makes the picture more gloomy.
Yes there is wealth here to be sure, but this area is extremely depressed, We need real economic growth, and while I love going out to eat at a good restaurant, those aren't the kind of jobs that are going to improve those rankings.
The most interesting part of the article to me was the statistic that 4200 Somalis have moved to Buffalo. I had never seen numbers this high before (I had heard maybe 1000), and if it is correct then that is a large number of immigrants from a single country arriving in the past couple of years.
While the point made by Econ 101 and others is valid, it doesn't invalidate the importance of the creation of new small businesses. Not only do these businesses employ people, but they typically involve investment of money (even it if is local money) in physical, taxable assets. Even if the business ultimately fails, the asset remains. Another owner/operator will be able to take it over without having to make the previous investment and will have a better chance of success. Sad, but true
There is also another element to the importance of new businesses. Small businesses in general are key to creating a sense of authenticity and place. These in turn are critical to making Buffalo a place where people will want to invest and create other companies. Any established business, and most entrepreneurs, can basically locate anywhere they want to these days. An important element if where they choose to locate will be the character of the community.
The same goes for what you might call civic entrepreneurs. They are more likely to stay in Buffalo if there are resources that make them enjoy being here. They in turn give back to the community by improving the neighborhoods in which they live, fighting for better schools, cleaner water, fewer wanton demolitions, etc.
No one would argue that a dozen new stores on Elmwood and Grant will have more impact on the local economy than a decision by Toyota to build a new Prius plant here would, but it is foolish to dismiss those businesses as completely trivial and irrelevant in Buffalo's revitalization.
It would be nice to get some new stores along our neighborhood commercial corridors that actually sell stuff we need at prices the average city resident can afford.
How novel would that be?
very-sceptical-of-tourism says "But we have lost over 200,000 in population in the city alone" While this is true it paints a gloomier picture than the reality deserves. Buffalo has indeed lost 300,000 residents since 1950 and when you say in the city alone it implies that the total regional loss is even greater. The fact is that in 1950 Erie and Niagara counties had a combined population of 1,050,000. In 2000 Erie and Niagara counties had a combined population of 1,170,000 or 120,000 more people than when Buffalo was at it's peak population. Yes we did max out in population in 1970 but that was really the blip caused by the baby boom. If you draw a curve based upon the population trends from 1900 to 1950 and extend that curve to 2000 you would end up with a two county population in 2000 of approximately 1.2 million which is just about where we are.
ready to eat half a crow for Sally say that "When you consider that Niagara county was in 700 and something place, and that constitutes another major part of the MSA, it makes the picture more gloomy."
His comment does not put the number into perspective. Since there are almost 3,500 counties in the coutry Niagara's rating still puts it in the top 20% which aint bad folks
Sally -
Readers and posters on BRO are unconcerned with these facts. We are consumed with emotional reactions to the loss of population and commerce in the City of Buffalo, specifically near Elmwood, Allen, and Main St.
The facts about the WNY region, the suburbs, and the economy as a whole are immaterial and should be disregarded. This is about Buffalo Rising, not about Amherst, Niagara Falls, or anywhere else for that matter. Buffalo lost status because the suburbs stole businesses and lured our residents away with the promise of better schools, safer neighborhoods, and nicer houses. We will never forgive them for that and we will hate them forever for what they have done.
/sarcasm off
That''s OK, Amherst and Cheektowaga alone are now facing the ills of city life with the increase of vacant homes and are now afraid of drugs and rats...LOL, LOL....YES! The burbs time is a comin'. Suckas!
GMAB - you are of course correct, I guess that's why most people refer to their mag as Elmwood Rising.
LOL - you are like a spiteful child. One article in the Buffalo News about vacant houses in Amherst and Cheektowaga (close to the CIty line in all accounts) somehow translates to Amherst becoming the East Side. Big, huge, humongous, differences between the suburban vacancy issues and those of the city. It will be a long time until they start tearing down entire neighborhoods in Cheektowage in the same manner that they do in various parts of the city. You are one petty little fool! Keep hoping for the social ills to hit the suburbs to the same degree and extent that they plague the city, hold your breath on that one jackass!
Can't argue with the premise that tourism jobs themselves do not sustain an economy if all they are is low-wage-no-benefit crap jobs. But let's keep our eyes on the prize: someone who visits here because of the CVB's efforts, is bowled over, and moves their business here.
Sally, you point out the metro area's population is steady over those time frames but how much has the nation grown in population in that time?
Is it not true we've fallen from a top-20 metro area to around 50th over that interval, and we're on that same steady pace downward with has no end in sight?
I did not say the metro's population was steady since 1950 I merely pointed out that it is som 10-15% larger now than it was then. Your theory of relativity is meaningless. Who cares if other cities have grown far faster and larger than we have. My point is still that we are larger now as a metro than we were when the City of Buffalo was at it's population peak. Nothing more nothing less.
Or let me put it inot terms you might be able to grasp. If you and I both make $100,000 per year and I get a raise to 117,000 and you get a raise to $300,000 how am I hurt? If you are my friend I should be happy for you, if you are my enemy I will feel jealous. Instead I should not worry about your pay and simply enjoy my raise.
I didn't say you do or should care, but a few examples off the top of my head of types of people who frequently comment here who would care:
- People who see their kids move away to those other cities care.
- People who bemoan the outflow to those other cities of graduates from our local colleges care.
- People who don't want the Buffalo Bills to move might care some year soon.
- Lots of others along the same lines, you get the idea.
Sally, you're argument is so flawed. If one person gets a raise to $300,000, and another gets a raise to only $117,000, then the latter is significantly hurt by this. When income goes up, so do prices. In this case, the average income went up by over 200%. So now cars that used to cost $25,000 cost $50,000. Central Park houses are sold for upwards of $1 million. Thats fine for the guy who's salary was tripled, but what about the guy who's only making $117,000 a year. Just like he can no longer afford to live the comfortable life that he used to, Buffalo can no longer compete (and hasn't been able to for the past several decades) with the cities that have continued to grow and prosper for the past 40 years.