Photo Courtesy Frank Kovalchek Used Under Creative Commons Attribution 2.0 Generic license
Hey! Anchorage made it into another list!
…Where did you go? Oh, there you are. You can come out from underneath your desk now. This was actually a good list. We want to be on this one. Hooray for good things!
Credit Donkey, a website that offers credit card comparisons and financial education, released a December report recognizing the best cities in the United States for small businesses. It appears they were able to look beyond our also-list-worthy fashion sense issues and award us the title of the #6 best small city for starting a business.
According to the report, the results were based on five data points:
- Percentage of total small businesses that have failed in a particular area
- Small business birth/death differential
- Percentage of population employed by small businesses
- Percentage of residents with a bachelor’s degree or higher
- State’s percentage of annual venture capital investment.
Turns out, according to these metrics, we’re doing pretty well. Only 12 percent of our small businesses fail, and for each of those failures, 19 new efforts are born – employing over eight percent of our workforce.
Anchorage makes the list despite $0 in venture capital investment over the past two years. Instead, the city earned its ranking with a highly educated population – 30.9% of residents have at least a bachelor’s degree – and the second highest percentage of residents employed by small businesses of all cities in the top 10.
The report also pointed out the municipality’s recent move to set up the 49th State Angel Fund (49SAF), which set aside $13.2 million in federal funding “to invest in promising local businesses.” The money comes from 2010’s Small Business Jobs Act, a stimulative measure designed to “strengthen state programs that support lending to small businesses and small manufacturers.”
The Anchorage Economic Development Corporation (AEDC) is a strong partner with the 49SAF. I spoke with AEDC Vice President Jon Bittner about the report, which is a nice compliment to an organization working to make Anchorage the number one city to live, work, and play:
I work with the 49SAF project manager Joe Morrison to do the initial vetting of applications and Bill Popp, AEDC’s President & CEO is the Chairman of the advisory board that does the project evaluation. To date over $2 million has been distributed and we are confident that the remaining funds will be distributed over the next 6-12 months.
Anchorage has seen quite the boom of national chains moving to town. While big box stores offer convenience, they also could negatively affect our small business environment if we aren’t careful. If those small businesses start dropping off, it could have major negative consequences for the local economy. Numerous studies have shown that money spent at independent, local businesses is much more valuable to the community. A decade ago, the Institute for Local Self-Reliance conducted a landmark study of this multiplier effect in Maine. The study found that for every $100 spent locally, $45 went to secondary local spending (meaning it’s recirculated into the municipality), compared to just $14 for larger box stores.
The AEDC is aware of the importance of growing and maintaining our small business community. Bittner indicated that plans were in the works to launch a business retention and expansion effort, beginning with a comprehensive survey of businesses in Anchorage:
This survey will be one of the most in-depth analyses of the Anchorage business community ever conducted and will be used to identify barriers to business growth and overlooked opportunities. We will use this data to drive future economic development advocacy efforts and to assist local businesses in growing.
As national chains like Texas Roadhouse and Hard Rock Cafe trickle into town, the municipality needs to embrace policies ensuring that local businesses don’t get lost in the shuffle. The current distinction we enjoy as a leading small business-friendly community is vital for our continued growth and vitality, and a nice buck in the national trend leading away from what we have.
Besides, “number one” has a nice ring to it.