DETROIT BUSINESS ASSOCIATIONS A Best Practices Guide
AUTHORS Katrina Chavez Caitlin Jacob Daniel J. DJ Mason
ABOUT THIS REPORT This report was commissioned by the Arab-American and Chaldean Council (ACC) to inform and catalyze the formation of a NorthTown Business Assocation. However, the content in these pages would be helpful to any business assocation in Detroit, as it draws braod conclusions and insights from data collected across the city.
DETROIT BUSINESS ASSOCIATIONS
a best practices guide
This report is the product of interviews with a wide range of business associations (BAs) across Detroit, conducted over a two-month period in early 2016. These BAs were selected so as to provide a sufficiently diverse set of examples, as well as to demonstrate how organizations have developed successfully in areas similar to the Seven Mile Corridor. Conversations focused largely on best practices, structure, funding sources, and community projects. Several common trends emerged from these conversations. While the interview subjects varied in size, structure, and level of formality, some elements were found to be present in the majority of BAs interviewed. These elements are reported in this document as “core actions,” or actions that were consistently found to be central to the successful operation of a BA.
Core Actions
SPECIAL THANKS The authors of this report would like to thank the following organizations and their respective representitives for their time, information, and insights that inform this report:
8 Mile Boulevard Business Assocation Corktown Business Association Gratiot Business Assocation John R Businesss Assocation Midtown, Inc. Osborn Business Association Southwest Detroit Business Association
1.
Focus on work that is guided by a clear mission and member goals.
2.
Build connections and seek opportunities to collaborate with other community stakeholders.
3.
Establish clear leadership and secure staffing.
4.
Charge Membership Dues.
The following report describes these four core actions in more detail to create a “Best Practices Guide.” The Spotlights section provides more detailed information about specific business organizations, as well as examples of different structures and approaches to developing a BA.
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ABOUT BUSINESS ASSOCIATIONS: A business association (BA) (also known as a merchant association), is a voluntary, member-based organization focused on promoting the interests of businesses within a certain community. Often it provides a means for business owners and other concerned stakeholders to meet face-to-face on a regular basis and build relationships, identify common problems, advocate and lobby for their interests, and combine resources in an effort to address shared concerns. Some business associations are legally incorporated organizations with a board of directors, bylaws, paid staff, and formal missions while others are informal networks of business owners and community members. Although alternative models of district management exist (such as the Main Street Program and the Business Improvement District), a business association is most suitable for an emerging corridor or one that is both experiencing high vacancy rates and disinvestment, and is also looking to lay a foundation for a healthier commercial district and foster partnerships between existing business owners.1 The Power of Organizing and Management Business owners and concerned stakeholders can organize to address different goals such as business support and attraction, marketing, event programming, and physical improvements and design.2 These are only broad categories and each organization should be responsive to the specific needs of its commercial district. In some instances, merchants have also organized when faced with little or no institutional support for neighborhood business development.3 A major advantage of business owners working together is increased leverage with city staff and politicians when lobbying for their collective interests.4 A BA can be a strong advocate in promoting the best interest of the commercial district to the rest of the neighborhood and city. Some BAs have also acted as an information gateway between local officials, the Chamber of Commerce and the larger business community (Sutton, 2010). The commercial corridor also benefits from increased collaboration between individual businesses, property owners and other stakeholders, for example, through regular business hours, more attractive streetscapes and targeted branding and promotion, all of which can help increase foot traffic and draw investment to the area. Core Actions for Business Associations While the BAs that were interviewed for this report varied in size, structure, and level of formality, certain characteristics were found to be present in the majority of BAs interviewed. These are reported in this document as “core actions,� or actions that were consistently found to be central to the successful operation of a BA. Core Actions: 1. Focus on work that is guided by a clear mission and member goals. 2. Build connections and seek opportunities to collaborate with other community stakeholders. 3. Establish clear leadership and secure staffing. 4. Charge Membership Dues.
CLEAR MISSION & GOALS
CORE ACTION #1:
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Successful business associations are mission-driven and prioritize member goals. A BA may begin with just a few local business or property owners gathering to express concerns or collaborate on small projects. In order to build momentum and create a foundation for organized success in the future, these stakeholders should immediately identify common priorities and articulate why they have come together as a group. They can start by: 1. Creating a mission statement that indicates broad goals and long-term plans 2. Developing a small list of short-term goals and projects, based on the mission statement, that will have an immediate impact on the community These steps will ensure that the BA has not only a clear direction moving forward, but also immediate objectives on which to focus their efforts. A good mission statement will provide a clear focus for the organization’s efforts while still remaining broad enough to encompass a variety of different activities. The individual project goals identified by the BA should all work toward the larger mission articulated in this statement. For example, if the mission is to “attract new businesses to the corridor,” then related project goals could be “list available buildings for lease on an online database” or “complete a study of area consumer demand.” Project goals should be easily measured and achievable within 1-2 months. One way to ensure that these projects are easily measured is to pursue projects that have a tangible impact upon the corridor. For instance, one short-term project goal could be “to board up the unsecured, blighted, and abandoned properties on the corridor using resources provided by the Department of Neighborhoods.” If completed successful, this type of project can actually help to recruit new members to the organization by visibly demonstrating they type of work it is accomplishing. Furthermore, clear evidence of successful and organized efforts to create value in a community can be a powerful way to gain attention and support from the City of Detroit and other leaders. City officials and grant organizations with limited resources concentrate their efforts in neighborhoods where they will have the largest impact; often this means focusing on communities that have already begun to lay a foundation for future development on their own. A formal organization with a clear mission and visible involvement in the community helps to make a case for external investment.
Takeaways for the Seven Mile Corridor: ● The business association should craft a mission statement and identify one or two specific, smaller goals that work toward the stated mission. Ensure the goals are measureable and do not require significant funding or other resources from individual members. ● Determine a timeline for these goals to be completed. ● Once these goals have been achieved, target potential new members and use your results to help persuade them to become involved.
RESPOND TO KEY STAKEHOLDERS
CORE ACTION #2:
Business associations need to respond to the needs of both its members and the surrounding community as a whole. One tangible benefit of the formal BA is that it provides a place for business owners to come together and identify challenges and problem solve. The association should identify common challenges that most (if not all) business owners are having and work to address those first. These projects do not need to be time or money intensive, but should address a pressing need in the community. For instance, one BA interviewed found that an excessive amount of blighted buildings in between existing businesses was creating problems on the sidewalks as well as damaging its reputation with external patrons. In response to this challenge, multiple business owners spent an afternoon documenting the blighted buildings by taking pictures, collecting addresses, and writing up very short descriptions of the problems each building was causing; this information was then sent to the City. These same business owners continued to follow up with the City regarding these blighted buildings until demolition crews finally were sent out to remove some of the blight.
An effective BA should also spend time understanding the needs of business owners and community members who are not formally a part of the association through regular contact, interviews, or surveys. This helps to build relationships and provide additional value to the community, as well as to potentially encourage new member growth. During interviews, multiple BAs mentioned the benefits of a diverse membership, including strengthening their ability to be responsive and stay intimately connected to the community, both of which contribute to increased effectiveness. A more diverse membership body ensures that a wide variety of concerns are voiced at meetings and that a greater number of resources are available to address those concerns. Additionally, a BA should seek to utilize resources in the community as much as possible. An additional benefit of a formal association is the chance to bring together different organizations with different capabilities and resources for the purposes of collaboration (e.g. snow plowing, fencing, demolition, etc.). For instance, one BA interviewed discussed how their membership included a steel company and a demolition company; both of these businesses volunteer small amounts of their time, money and expertise each year to make the community a better place. The steel company has fixed the chain link fences at local parks, and the demolition company has helped to remove blight. Identify your association’s mix of skills and resources and put them to work locally to enhance the BA’s surroundings.
Takeaways for the Seven Mile Corridor: ● Once the initial members of the BA are identified, begin meetings to discuss the most urgent problems along the Seven Mile corridor. Are vacant buildings causing problems? Are potential customers able to clearly identify which businesses are in operation, as well as their hours of operation? ● BA members should also consider attending local neighborhood association meetings, such as the Grixdale Farms Neighborhood Association or Penrose Community meetings to see if any of the problems identified along the corridor align with those facing the neighborhoods. Can collaboration between the BA and neighborhood groups achieve a faster, cheaper, or more effective result?
The ideal candidate for this position would be well-connected and knowledgeable about the community, as well as committed to effecting positive change long-term. Specifically this person should be well-versed on current developments in the area (including the current status of local businesses and concerns of individual business owners) and have the necessary relationships to garner the support of property/business owners and other stakeholders along the corridor.
ESTABLISH LEADERSHIP & STRUCTURE
A leader (or set of leaders) is vital for ensuring the BA stays focused on its mission and progresses toward each of its stated goals. This person would be primarily accountable for organizing events/projects and securing sufficient funding and serve as the association’s representative to other groups and organizations (e.g. the City of Detroit, major foundations, and other business associations and community groups).
CORE ACTION #3:
Business associations need to respond to the needs of both its members and the surrounding community as a whole.
In addition to a strong leader, a BA also requires dedicated staff that can focus specifically on developing the association and administering its projects. Many of the BAs we interviewed suggested that at least one dedicated staff member is necessary for the success of the business association. This person (either full or part-time) will be able to focus on recruitment, outreach, community projects, and other association needs. Building relationships within the community, encouraging new businesses to join, and organizing regular projects for the businesses within the community all require consistent time and attention. Without at least a part-time staff member, it is hard to maintain momentum and accomplish association goals, not to mention secure outside funding for projects. A primary staffing challenge is identifying sufficient funding to support at least one staff member. The organizations we spoke to used either membership dues or external grant funding to support their staff member(s). In the organization’s early stages of development, a part-time staff member paid with a small stipend could be sufficient. As a part of the process of identifying leaders and finding supportive staff, the BA will also need to decide upon a structure for the organization. Some of the BAs interviewed had extremely formal structures with clearly delineated roles, while others acted more as informal mechanisms for gathering and sharing ideas. In order to make sure the role of leadership and staffing is clear, it is important for the organization to choose what their structure will look like.
Takeaways for the Seven Mile Corridor: ● The first members of the Business Association should determine a governance structure. Who will make the final decisions? Who will be in charge of communicating to city and other local officials? How will resources be collected and distributed among members? Will there be a President, Treasurer, Secretary, etc., or will another structure be used? ● Focus on securing enough funding for at least a part-time position solely dedicated to business association and development activities. Create a target salary for the position and have members and other stakeholders apply for grant funding until the target amount is reached. ● Create a position description and hire at least a part-time staff member. Make sure to include “secure funding on an annual basis to retain staff” as an action item in the position description in order to ensure the position lasts longer than one year.
Paying membership dues shows that members are committed to being part of a strong organization. Membership dues in a business association are important for two primary reasons: 1. They can provide a consistent source of general funding, and 2. They act as a tangible commitment from the businesses and increase the potential dedication of the businesses to the organization.
Membership dues should be set at a rate that ensures commitment from members but does not exclude potential partners from joining the association. Many of the BAs interviewed have a tiered-system of membership dues to ensure that every member is contributing, but in a way that is appropriate for their budgets. For instance, one BA had a small, flatrate membership due for local businesses that were active members of their organization; another, smaller fee for local businesses who wanted to contribute but did not have enough time to stay active in all efforts; and free membership for local churches, schools, and institutions. Others had both dues-paying and non-dues-paying members; the first group would receive greater benefits and have more influence in the direction of the group. This tiered-system provides a means of including as many community members as possible while still ensuring that there is a dedicated group of members providing financial commitment. Without dues, it is easy for members to lack any kind of tangible commitment to the organization and their involvement may be less consistent. Membership dues are often used as general funds for overhead purposes, staff wages, events and marketing, etc. and can act as a consistent supplement to outside funding sources. Membership should determine use of the funds based on their identified goals and objectives. These funds are almost always used in combination with grant funding to accomplish the organization’s goals. Prospective BAs should look to fund more expensive projects with grant funding instead of dues in order to minimize the cost of membership-particularly in areas with few existing businesses.
Takeaways for the Seven Mile Corridor: â—? Charge membership dues. They do not need to be large, but they need to be enough to show that the member will be committed. The BAs interviewed charge between 100 and 500 dollars annually per member. Determine what this revenue will be used for and who will be responsible for holding it. â—? Consider a tiered-system of membership dues. The Seven Mile corridor has several churches or other institutions that may not be able to contribute monetary dues, but that might be willing to contribute volunteer hours or other resources instead.
CHARGE MEMBERSHIP DUES
CORE ACTION #4:
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highlights of Detroit business associations that give useful examples of projects, initiatives or approaches for starting a business association.
DETROIT BUSINESS ASSOCIATIONS SPOTLIGHTS
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SPOTLIGHT #1:
8 MILE BOULEVARD BUSINESS ASSOCATION The 8 Mile Boulevard Business Association (8MBA) was founded in 1993 by Detroit and the three surrounding counties along 8 Mile in order to coordinate government and stakeholder efforts along the corridor. The mission of the 8MBA is to revitalize and promote the Eight Mile transportation, business and residential corridor (between I-94 and I-275) by linking the efforts of the public and private sectors. The 8MBA is a 501(c)(3) non-profit charitable organization; 50 percent of its members are governmental institutions and the other half are businesses and connected organizations.
Governing Structure: The organization has a Board of Directors with 30 members, half of whom are elected officials from all member municipalities and the Director of MDOT, and half of whom are businesses and industry associations. Staffing: There are three full-time members (Executive Director, Director of Programs, Director of Business Development), one of whom is paid for through grant funding. Membership dues: Government and business entities pay dues on a sliding scale, based on ability and resources. Not all members are dues-paying members. Services and benefits to the corridor and community: ● foster government collaboration ● business assistance (facade improvements, navigating permit process and code compliance, connecting businesses to services and application assistance) ● neighborhood engagement (community clean ups and annual Clean the D event, block groups capacity, shared advocacy on local issues)
Key Lessons: • Form strategic partnerships and alliances. 8MBA partnerships span across three counties and 27 miles. Consider how alliances with other groups in the area could expand access to grants or provide a way to collaborate on larger-scale projects, such as mitigating high commercial vacancy.
SPOTLIGHT #2:
JOHN R BUSINESS ASSOCATION The John R BA was formed close to 20 years ago by a group of connected businesses who were concerned about the increasing blight and vacancy in their neighborhood and wanted to make positive changes. Since then, the organization has met informally about once a month. The network pursues small-scale projects focused on creating a positive environment for existing businesses and uses resources that already exist in the community. Their area of focus is spanned by 1-75 to Woodward and 6 Mile to 8 Mile and currently there are approximately 12-15 members. Recent activities and projects carried out by the John R BA include the renovation and annual clean up of a neighborhood park in partnership with other community stakeholders, holding an annual neighborhood Christmas party, and compiling a listing of blighted structures for demolition.
Governing Structure: Because this has remained a relatively informal group of concerned business owners coming together, there is no set governing structure in place. Staffing: There are no formal staff members. Projects are carried out by the business owners – often focused on goals that can be achieved using resources the businesses already possess. Membership Dues: $250 a year for business members, community members and organizations typically do not pay dues.
Key Lessons:
• Leverage community strengths and the expertise of your members. Brainstorm how each member of the business association can use their strengths and resources to further the association’s goals and projects, whether it is donating pastries and juice, or professional services like demolition and carpentry, or volunteer time for a neighborhood clean up.
SPOTLIGHT #4:
CORKTOWN BUSINESS ASSOCATION Formed in 2012, when the Corktown BA started with just 25 members focused on the restaurant industry, it has since grown close to 115 members, including suppliers with an interest in the area’s local businesses. The organization grew out of a need for representation within the community and started with a town hall focused on addressing the problem. The Corktown BA’s mission is “to promote the business and economic climate of Detroit’s Historic Corktown area” and has grown to address a wide variety of challenges in the community, including non-business related issues such as safety. As a result of their success, the Corktown BA has found recruitment to be largely unnecessary: people want to be a part of an organization they see as having a concrete impact on their community.
Governance Structure: The organization includes a Board of Directors with special subcommittees, as well as volunteer officers (such as president, vice-president, secretary and treasurer).
Membership Dues: Businesses pay $100 annually for membership. Staffing: They have recently hired two paid positions: an executive director and assistant.
Key Lessons:
● Build your network. Building relationships with existing BAs can be crucial, especially in the early process of forming a new BA. The experiences of other BAs in the city can provide a roadmap for new associations and help identify what they need to be successful in their own community. ● Diversify your membership base. The more diversified the membership, the more the BA is able to address issues facing the district.
SPOTLIGHT #3:
OSBORN BUSINESS ASSOCATION The Osborn Business Association (OBA) was created in 2012 and grew out of a need for the Osborn Neighborhood Alliance (ONA) to find new ways to support business development and the economic revitalization of the area. Composed mostly of businesses, along with some community organizations, the OBA is the recipient of the New Economy Initiative grant funding and focuses its efforts on helping entrepreneurs to develop new businesses and create new jobs. The OBA “serves to develop, build and promote the neighborhood in order to increase economic opportunities and the quality of life in Osborn,” and has been incorporated as a 501(c)(3) non-profit charitable organization. Activities and projects by the OBA include coordinating networking mixers and business training for small-business owners and the Oval Bucks program where residents receive a stipend to shop at neighborhood businesses.
Governance Structure: There is no formal Board of Directors although the founding members continue to exert influence and remain highly involved. Much of the leadership comes from the Executive Director and Business Manager. Staffing: The Executive Director and Business Manager are paid staff members while the Chairman position is unpaid. Membership dues: Members pay annual dues of $50.
Key Lessons:
● Keep the process of starting a BA quick and efficient. Set a three-month target for creating your organization, adopting bylaws and establishing articles of incorporation. ● Strong leadership from within the community. A successful organization needs someone to lead the vision for all that are involved, provide the structure and also delegate tasks - this should be someone that everyone can identify with and is from the community.
SPOTLIGHT #5:
MIDTOWN DETROIT, INC. Midtown Detroit Inc. was originally formed in 1976 as the University Cultural Center Association (UCCA). Today, membership spans over 150 members, with MDI providing a variety of services and supports to all businesses within the Midtown neighborhood. These include site location assistance, leasing for prospective businesses, reviewing business plans and guiding for marketing, signage, and general operations.
Governance Structure: The organization includes a Board of Directors, Executive Committee and staff members. Membership Dues: None. Staffing: There are five staff members as part of the business/economic development team: a Business Mitigation Manager, Technical Assistance role, a role focused on relationship-building and site visits, and two focused on marketing and facilitating processes with the City of Detroit
Key Lessons:
● Build relationships and trust between the partner organization and the businesses. “If the businesses feel your goals and values align with their own efforts, they’ll speak to you freely and you’ll be much more effective in understanding how to effect change on a neighborhood scale.” ● Know the properties in your area on a deep level. It is important to develop useable and accessible data on properties and businesses within the boundaries of the business association. This allows the organization to attract additional businesses and outside investors, as well as more easily apply for external funding opportunities.
APPENDICES & REFERENCES Appendix 1: List of Business Associations Interviewed 1. 2. 3. 4. 5. 6. 7.
Midtown Detroit, Inc. Corktown Business Association John R. Business Association Osborn Business Association Southwest Detroit Business Association 8 Mile Boulevard Business Association Gratiot Avenue Business Association
Appendix 2: Common Interview Questions 1. 2. 3. 4. 5. 6. 7. 8. 9. a. 10. 11. 12. 13. 14.
Why did you become a BA? At the early stages, how did you convince existing owners to join? How long have you been a BA? What types of members are in your BA? How many members do you have? Can you describe your governance structure? (Are there specific roles/committees or is it more informal?) What is your staffing like? (Voluntary or paid staff?) How do you determine your mission/goals/objectives? How are you funded? What is your operating budget? Do you engage in outside fundraising? What services do you provide to members of the community? Did you work with any outside organizations to help support you during the formation of your BA? Eg. the City of Detroit? Do you have a relationship with the City of Detroit? What’s that look like? What is your relationship like with the community at-large? What efforts does your BA engage in to attract new businesses to the corridor?
References
a
New York City Department of Small Business Services. (2002). Starting A Business Improvement District: A Step-by-Step Guide. New York, NY. 2 Eppig, M. & Brachman, L. (2014). Redeveloping Commercial Vacant Properties in Legacy Cities: A Guidebook to Linking Property Reuse and Economic Revitalization. Columbus, OH: Greater Ohio Policy Center. 3 Sutton, S. (2010). Rethinking Commercial Revitalization: A Neighborhood Small Business Perspective. Economic Development Quarterly, 24(4), 352-371. 4 Morgan, J. (2011). (Re)vitalizing Inner-City Neighborhood Business Districts: An assessment and strategy framework for integrated microbusiness and real estate development by nonprofits. Cambride, MA: Harvard Joint Center for Housing Studies and NeighborWorks America. 5 Gibbs, R.J. (2012). Principles of Urban Retail Planning and Development. Hoboken, NJ: Wiley & Sons, Inc. 1