TABLE OF CONTENTS
- ABSTRACT
- PURPOSE
- THE CHALLENGE
- THE SOLUTION
- BIOGRAPHY
- INTRODUCTION
- IMPORTANCE OF A SMALL BUSINESS ECOSYSTEM
- THREATS TO THE SMALL BUSINESS ECONOMY
- WHAT SMALL BUSINESS NEEDS
- SMALL BUSINESS FAILURE
- AN ECOSYSTEMS SOLUTION
- ECOSYSTEM BENEFITS
- ECOSYSTEM DEVELOPMENT
- ECOSYSTEM ROAD MAP
- BUILD A BUSINESS SUPPORT INFRASTRUCTURE
- CREATE SMALL BUSINESS ECOSYSTEMS
- BUILD ON AN EXISTING SMALL BUSINESS FOUNDATION
- PROMOTE GROWTH IN COMMUNITY COMMERCE
- BACKGROUND
- BEAUFORT COUNTY BUSINESS HISTORY
- CURRENT BUSINESS CLIMATE
- BEAUFORT COUNTY DEMOGRAPHICS
ABSTRACT
Purpose
This comprehensive White Paper explores the importance of building entrepreneurial small business ecosystems in rural communities to promote economic growth and sustainability. It discusses small businesses’ challenges in these areas and highlights the need for well-coordinated community programs and business ecosystems to establish economic stability and be sustainable.
The paper offers solutions that include identifying alternative funding sources, workforce development programs, and community-based support to overcome these challenges; it concludes by emphasizing the significance of leadership by local government and the need to foster supportive environments, leverage local resources, support the existing small business base, and focus on short-term objectives to achieve long-term economic sustainability and success.
By using Beaufort County and its communities as a model, with a particular focus on the City of Washington as a case study, the paper aims to generate shared knowledge of the economic landscape in rural North Carolina. The findings drawn from this study will serve as a foundation for building consensus and promoting initiatives to address the need for increased sustainability and stability in rural small business communities in North Carolina.
The Challenge
Despite rural communities’ financial dependency on their small business economy, local small businesses remain mostly unsupported and are not enabled by their community’s economic development or local government.
Over time various efforts have been made to revitalize multiple business sectors and downtown areas in Beaufort County and to attract new businesses; however, despite appearances, the resulting economic growth has been moderate.
Rural communities’ dependence on small business economies makes them more susceptible than urban communities to economic swings that adversely affect community growth. As a result, rural capital investment in rural communities has been mainly applied to fund recovery rather than new development.
Beaufort County, the City of Washington, and other similar rural communities continue to face difficulties regarding poverty, job loss, and population decline.
Small businesses in rural areas face the challenges of having limited access to funding, stiff competition from larger firms, a lack of skilled workers, regulatory burdens and a critical shortage of strong, robust, organized business support.
There needs to be more explicit recognition of the magnitude of the contribution to be made through diversity and inclusion. All rural communities are multi-racial, and the intersections of diverse backgrounds must be better emphasized and understood throughout rural development efforts.
The Solution
Many small rural communities across the USA are addressing the challenges small businesses and entrepreneurs face in rural North Carolina by establishing small business ecosystems and improving their supporting business infrastructure that promotes entrepreneurship and resulting business growth.
Current small business support resources in rural communities encompass a range of initiatives and organizations. These resources include government programs, non-profit organizations, local chambers of commerce, educational institutions, and community-based initiatives.
By coordinating these resources and fostering collaboration within the ecosystem, rural communities can create a more integrated and effective support system for small businesses, helping them thrive and contribute to local economic development.
A small business ecosystem offers a supportive environment, promotes collaboration and partnerships, enables access to resources, entrepreneurial education, inclusivity, showcasing community strengths, economic growth, and celebrating success. It empowers small business owners and drives economic development within the community.
A small business ecosystem establishes a solid foundation that enables businesses to thrive and succeed in a competitive landscape by providing this access to these resources and building a supportive community.
Government leadership is essential in engaging the community, creating a supportive environment for entrepreneurship and economic growth, and creating the organization necessary to plan for and implement the development of a business ecosystem.
A community-responsive Small Business Advisory Board comprised of diverse stakeholders, which includes government representatives, business organizations, industry leaders, and volunteers, can play a crucial role in connecting small businesses with various organizations, resources, and institutions that offer business support and can also serve as a local point of contact, facilitating information sharing and coordination between small businesses and the available resources available to them in the municipality or county they represent.
AUTHOR
This white paper is authored by Keith Hudson, Executive Director of the Pamlico Business Resource Center. It is based on his knowledge, research, experience, and interactions with numerous Federal, State, regional, and local individuals and entities over three years as a small business advocate, mentor, and consultant in Beaufort County, NC.
Hudson has enjoyed a successful career as an independent business consultant and small business owner and holds degrees in Mechanical Engineering and Manufacturing Technology and Management.
Hudson first became involved in the Beaufort County small business community when he began working with the Economic Development Director Martyn Johnson. He provided business recovery support following the economic impacts of Hurricane Florence and the COVID Pandemic.
Over the last two years, Hudson has worked on a one-on-one basis with over sixty small business owners in Beaufort County, NC. and gained significant insight and knowledge of the local business environment, including the unique economic challenges and opportunities regarding small business development in Beaufort County that make this white paper relevant and actionable by the local community and other rural areas in NC.
Hudson has discussed the challenges of small business development and economy in rural areas of North Carolina with and received input from the NC Secretary of State, the NC Secretary of Commerce, the President of NC Rural Center, the Regional Director of the Small Business Administration, East Carolina University School of Business, Directors of the local Small Business Training and Development Center. and the Small Business Center, at the Beaufort County Community College, local business leaders including women and minority business owners, government officials and has presented information on the activities of the PBRC and the local small business community to the local Chamber of Commerce, Washington Tourist Authority, and attended multiple seminars and conferences on small business and entrepreneurial development.
The Pamlico Business Resource Center collaborates with the Beaufort County Community College Small Business Center. It is a mentoring program to strengthen their combined support and contribution to developing a robust Beaufort County small business community economy.
The Pamlico Business Resource Center has received funding from Duke Energy, Tideland Electric Membership Cooperative, NC IDEA, Beaufort County Community College, and Beaufort County. The PBRC is also an ENC Business Connectivity Alliance and NC Small Business Coalition member. PBRC is an Ice House Entrepreneurship Program provider.
For more information, contact keith@pamlicobrc.org or go to the website www.pamlicobrc.org
INTRODUCTION
The lack of available funding and timely, responsive access to the small business development resources allocated towards small businesses is impeding the growth and viability of business economies in rural areas like Beaufort County.
Rural communities do not enjoy the benefits and economic security of having large industries or corporate investments within their community. In contrast, their business community consists of many ‘Micro’ businesses.
The micro-business community plays a vital role in sustaining the local community by providing essential goods and services, creating job opportunities, and contributing to the overall financial well-being of the community.
A systemic problem emanates from the need for recognition by small business support agencies that Small and Micro businesses are different and require different levels of support.
U.S. Small Business Administration (SBA) defines a small business based on industry-specific size standards, which can range up to 500 employees.
Micro businesses are generally considered the smallest category, often defined by having fewer than 20 employees and lower annual revenue thresholds than small businesses.
In Beaufort County, 95% of all businesses have less than 20 employees, contributing 87% of the gross annual payroll, of which over 56% are sole proprietors that generate 10%. Of the yearly payroll. (2020 census)
By comparison, support for larger small businesses centers around enabling scaling and expansion and focuses on small business communities in urban areas. In contrast, micro-business support in rural areas requires addressing community limitations and assets, sustainability, growth, and increasing accessibility to essential resources.
While both small and micro business categories require assistance in financing, marketing, planning, and compliance, it should also be recognized that the support services for small and micro businesses share similarities; they must also have significant differences and be tailored to the specific needs of each business category and the community it serves.
Because most County Economic Development Departments do not consider small business development a primary focus, rural municipalities must provide the community support necessary to build a dedicated economic development initiative and create an ecosystem to support their business community and its economy.
The Importance of a Small Business Economy
Small businesses are critical to the economic health of rural communities because, in most cases, they serve as the backbone of the local economy.
They provide employment opportunities, drive innovation, and contribute to rural areas’ vitality and sustainability. Small businesses are vital for the economic health of rural communities by creating jobs, building economic diversity, and fostering community engagement.
As a community, they serve as major employers, reducing the need for long commutes and supporting local economic stability. Their presence contributes to the local economy by offering unique products and services and supporting other businesses within the community.
Small businesses in rural areas often have strong connections with the community, engaging in local initiatives and fostering a sense of pride. Supporting and nurturing these businesses is crucial for the long-term prosperity of rural communities.
These small businesses generate income and tax revenues that can be reinvested in the local economy, supporting other businesses and services.
Small businesses create new diversification within the local economy, reducing the vulnerability to economic downturns or changes in more prominent industries.
Threats To Small Business Economy
Small businesses in rural areas face numerous challenges that hinder their survival and growth. These include limited market access and smaller populations which make generating sufficient sales difficult. Infrastructure that fails to connect with suppliers, customers, and markets.
Small businesses are often more susceptible to economic downturns due to limited financial reserves, dependence on local markets, and a lack of diversification. They face challenges in accessing credit, adapting to market changes, and retaining skilled employees. Additionally, their close connection to the owner’s finances can further strain the business during economic hardships.
Access to financing and investment capital is often limited, impeding expansion and hiring. Demographic changes result in a shrinking customer base and workforce. Competition from larger firms with more significant resources and economies of scale presents difficulties competing on price or quality.
Many small businesses, particularly in the services and trade sectors, need more representation and recognition as a contributing business segment.
What Small Businesses Need
In 2021 NC Secretary of State Elaine Marshall asked newly formed businesses during a three-year period,
“Looking back, what information do you wish you had when you started your business?”
Small businesses in rural areas encounter formidable competition from larger national and urban-based companies with more effective marketing and advertising resources. Community-driven online marketing and business platforms provide a solution by serving as centralized hubs for market research and advertising community engagement. Businesses can enhance their visibility, attract customers, and cultivate relationships. At the same time, residents will benefit from convenient access to local businesses, fostering community support and promoting local commerce.
The availability of skilled workers poses a significant challenge for rural small businesses. Finding individuals with the necessary expertise to fill job opportunities can take time due to the limited local population. Implementing new programs and funding to support businesses in developing on-the-job training programs and partnering with local community colleges can help address this issue.
Rural small businesses often encounter a significant regulatory burden as they navigate and comply with various regulations, including zoning laws, environmental regulations, and licensing requirements at the federal, state, county, and city levels. Local Government(s) should provide businesses with a streamlined and efficient way to understand and meet all the necessary regulations and operating standards.
Small businesses in rural areas need more comprehensive and qualified business support due to fragmented responsibility among organizations that need more funding and resources. There is a need for a centralized and accessible source of support for existing and prospective small business owners that would provide timely and qualified assistance, resource referrals and contact information for local authorities, technical and legal assistance, funding sources, regulatory compliance, and other essential business matters.
Small Business Failure
The failure of small businesses has far-reaching impacts on the local economy, community structure, and social fabric and results in increased unemployment rates, a decline in economic activity, and affecting other businesses and resident’s overall quality of life, reduced access to essential goods and services for the local community and population decline in rural areas.
Small businesses play a vital role in the community’s social fabric, and their closure leads to the loss of community gathering spaces and social connections, community culture, and traditional values.
Summary
To create a business-friendly rural town, the local government must take a leadership role in ensuring prospective and existing businesses have access to and benefit from:
Specific and streamlined regulations that make it easy for entrepreneurs to start and operate their businesses.
The availability of vital resources such as affordable commercial spaces, reliable infrastructure, and high-speed internet connectivity is crucial for businesses to thrive.
Financial assistance programs, grants, low-interest loans, and tax incentives will attract and support businesses. This includes offering tax breaks, investment credits, and infrastructure improvement grants.
Business support services like mentorship programs, training workshops, and networking opportunities that help entrepreneurs develop necessary skills and build valuable connections within the community.
Collaboration among local businesses, government agencies, educational institutions, and community organizations is fostered through programs encouraging resource sharing and collective problem-solving.
Community engagement is achieved through organizing events, festivals, and activities promoting local businesses.
Investing in infrastructure development, including transportation, utilities, and communication networks, is essential to enhance the overall attractiveness and accessibility of the town for businesses and potential customers.
A high quality of life with access to healthcare, education, recreational amenities, and a safe environment is essential to attract businesses and their employees.
By focusing on these factors, a rural community can create a business-friendly environment that attracts and supports the growth of businesses, contributing to economic development and sustainability.
Rural consumers play an essential role in supporting local small businesses by actively patronizing small businesses, promoting them to others, and engaging with them in meaningful ways using community-provided resources and tools developed to facilitate their support for the small business community.
By working together, Local government and consumers can help ensure that small businesses continue to thrive and contribute to the community’s economic growth and prosperity.
Local Examples
The combined impact of Hurricane Florence and the Covid-19 pandemic left little opportunity for recovery, particularly for small businesses. The lack of organized relief services tailored to small businesses and the inability to take advantage of them that could have made them aware of and apply for PPP and other disaster relief programs.
Many local small business owners faced challenges obtaining loans due to inadequate records, reduced revenues, and higher operating costs, making them ineligible for financial aid or loans.
Faced with no alternatives, many local small businesses chose to use available funds to do what they had to do to keep the doors open and take care of their families through tax and other cost avoidance. That necessitous action has left them with insurmountable debt. With no remaining relief programs available to help them, they cannot qualify for conventional loans due to high debt ratios, poor credit, and tax obligations. They are now faced with business closure.
In another case, a minority-owned small business faced a forced relocation, and its costs couldn’t qualify for a loan and had to rely on crowdfunding to save their business. These examples highlight the need for better small business bookkeeping and administration, access to business training and information, targeted relief efforts, and support mechanisms for small businesses during times of crisis.
AN ECOSYSTEM SOLUTION
To ensure long-term success and sustainability meets the needs of rural small business communities like Beaufort County, the local government must establish a business-friendly environment with the necessary structure and qualified resources to support existing businesses, encourage new ventures, and promote overall growth.
The Small Business Economic Development Strategy for rural communities would require the development of a small business ecosystem that will:
Leverage the area’s business clusters and other assets, such as proximity to higher educational institutions, larger population centers, and tourism and other attractions, to attract more retirees, tourists, residents, employees, and businesses.
Improve access to quality education and training to develop and create a more skilled and productive workforce to attract new businesses and help existing businesses expand.
Develop partnerships and collaborate with nearby communities to encourage innovation and technology to stimulate economic growth.
Improve the local infrastructure and encourage community involvement that furthers small businesses’ economic growth by providing access to funding and other essential support.
These strategies will help to retain younger generations in the region, attract new businesses, and boost the local economy. Moreover, the same small business initiatives will help establish new businesses, expand existing ones, bring in new revenue streams, and establish rural communities as hubs for innovation and creativity through established economic growth based on small business development.
ECOSYSTEM BENEFITS
Quality of Life Improvement
Small business ecosystems positively impact property values and enhance residents’ quality of life in rural communities. It benefits homeowners and property owners by providing essential goods and services, contributing to community development, and creating a vibrant local environment.
The growth of small businesses creates job opportunities closer to home, allowing for a better work-life balance, improved property values, local investment, and overall enhanced quality of life.
The availability of diverse products and services offers residents more choices for shopping, professional services, and entertainment. Local businesses in the ecosystem provide personalized customer service, fostering community engagement and social connections through participation in local events and initiatives sponsored by these businesses.
Small Business Development
A small business ecosystem in a rural community is crucial in driving economic growth, community development, and sustainability and establishes a resilient financial foundation through:
Empowerment of small businesses.
Encourages innovation.
Promoting economic development.
Develops suppliers to larger businesses.
Creates jobs.
Generates tax revenue.
Diversifies the local economy.
Collaboration and networking within the ecosystem lead to knowledge sharing, resource pooling, and partnerships that drive innovation and competitiveness.
Access to vital resources and support services helps small businesses overcome challenges and seize growth opportunities. A thriving ecosystem attracts and retains talent, fosters entrepreneurship, and develops future business and community leaders.
Local Government Leadership
A small business ecosystem is crucial in driving economic growth and sustainability within a rural community; it creates jobs, generates tax revenue, and diversifies the local economy, leading to a resilient community economic foundation.
Increased collaboration and networking within the ecosystem foster innovation, improved business practices, and increased competitiveness through knowledge sharing, resource pooling, and partnerships.
It promotes community engagement, pride, and identity through active participation in community events, sponsorships, and support for local causes.
Utilizing local resources and sustainable practices, the ecosystem enhances the community’s and the environment’s overall well-being while empowering small businesses and improving residents’ quality of life.
ECOSYSTEM DEVELOPMENT
Development Of An Ecosystem
The term ecosystem was coined in the late 1930s to describe the interconnected relationships of biological systems with their physical surroundings, shaped by climate, geology, and history. It is commonly used to describe the interdependent relationships in an environment that facilitate growth and change. Similarly, small business ecosystems are unique and influenced by various factors that support their development, which can vary across industries.
A well-coordinated and inclusive business ecosystem supported by the community provides the road map to address the challenges small businesses face in rural locations. By establishing such an ecosystem, communities can attract new businesses, leverage local resources, foster innovation and collaboration, and provide a supportive environment for entrepreneurs and small business owners. This will help them overcome challenges, access resources, and connect with potential partners and customers, leading to the growth and success of small businesses.
Factors such as natural assets, culture, funding, resources, regulations, and available support organizations shape the unique characteristics of each business ecosystem. Each ecosystem must be tailored to its needs and goals, identifying and modifying the key components and dynamics supporting growth and success.
To build a thriving small business ecosystem, the local government must lead in fostering collaboration among residents, businesses, entrepreneurs, community organizations, and government agencies. This involves creating a supportive environment that promotes entrepreneurship and economic growth through consensus-building and effective communication.
The most effective approach is the establishment of a Small Business Advisory Board composed of diverse stakeholders to guide the ecosystem’s development and ensure representation from local governments, business support organizations, industry leaders, business owners, and residents.
The Small Business Advisory Board will engage with residents, business owners, and communities to understand their vision for small business development. It will guide the ecosystem’s development by offering insights and recommendations to local authorities. The board’s diversity and inclusiveness will ensure that all stakeholders’ perspectives are considered for a community-driven small business ecosystem.
The Small Business Advisory Board will communicate a clear vision, secure funding, and set goals to support the small business ecosystem. It will foster innovation, encourage learning, and promote stakeholder collaboration and a sense of community and collective progress.
To efficiently handle the administrative, research, business interface, training, mentorship, and support activities required for developing a small business ecosystem, the Advisory Board will be supported by a Small Business Expert funded by the local government, who will be a crucial resource and primary main point of contact for existing and potential businesses seeking guidance and assistance.
Support of the Advisory Board would include coordinating meetings, documenting minutes, conducting research, and helping entrepreneurs and small business owners navigate and make the most of available resources, including organizations like Small Business Development and Training Center, Small Business Center, Rise 29, and local academic institutions.
The goals and objectives of the Advisory Board would involve conducting a comprehensive inventory of existing community assets and identifying potential focus areas or clusters for development. Including:
Seek feedback from the community.
Identify business challenges.
Engage vital players.
Launch business development initiatives.
Measure the success of the small business ecosystem.
Conduct an inventory of community assets.
Identify focus areas and gaps.
Address regulatory barriers and talent shortages.
Engage critical players like entrepreneurs, investors, mentors, policymakers, and community leaders.
Initiatives would be launched to catalyze the ecosystem, and success would be measured through key performance indicators. Transparent communication with the small business community and regular public meetings would be maintained, fostering collaboration through networking events and collaborative workspaces.
For illustration purposes, the City of Washington and the Small Business Beaufort County Advisory Board could initially choose to establish different ecosystems to drive economic development within the following business segments:
The region’s abundant arable land and timber offer opportunities for farmers and agriculture, which can lead to increased local food production, job creation, and support for small farmers.
Access to the Pamlico River presents opportunities for fishing, aquaculture, water taxi, and boat building, meeting the demand for seafood and fostering eco- tourism.
The vital local manufacturing sectors of boat building, woodworking, air filtration, plastics, and chemicals offer unique opportunities for small businesses to locally supply products and services to the businesses in those sectors.
The area’s natural beauty attracts tourists, providing opportunities for outdoor recreation, farm tourism, and support for local businesses in the hospitality and retail sectors. The local Tourist Development Authority’s effective marketing program could be leveraged to promote further growth in hospitality, eco- tourism, and support services.
With a strong artistic presence in the community developing the arts can attract talented individuals and create job opportunities in music production, film and television, and visual arts. A vibrant creative community can foster collaboration and support among local artists, musicians, and filmmakers, creating a conducive environment for growth.
The success of these and other initiatives will be measured by several metrics, including the number of new small businesses created, job opportunities generated, and the region’s overall economic growth. At each step, a cost-benefit analysis should be conducted to determine the project’s financial viability and impact on the local economy.
ECOSYSTEM ROAD MAP
The four KEY action points that together make a viable Small Business Ecosystem are:
- Building a Business Support Infrastructure
By establishing a small business entrepreneurial infrastructure, rural centers can position themselves as business-friendly communities committed to supporting and developing their existing small business base. This infrastructure will attract and support new startups, promote growth within the small business community, and help rural centers showcase themselves as destinations for small business success.
The infrastructure provides a strong foundation of all services, support, and resources common to all ecosystems and enables a framework for effective small business ecosystems. It also serves as the foundation that supports and promotes growth for existing businesses and accommodates potential new developments across all business segments.
An ecosystem’s infrastructure encompasses physical and virtual resources, providing access to legal frameworks, financing options, business development services, incubator programs, research and development resources, and technology fostering entrepreneurship. It should also consider the community’s proximity to educational institutions, markets, skilled labor, transportation systems, and existing manufacturing clusters.
A vital aspect of the infrastructure is the role of business support, which can coordinate and involve other resources and services to assist potential and existing small business owners. It serves as a point of contact and referral for out-of-town business resources, enabling local small business owners to connect with organizations such as the Small Business Administration (SBA), Small Business and Technology Development Center (SBTDC), East Carolina University (ECU), Small Business Center (SBC), NC Manufacturing Extension Partnership (NCMEP), NC State University Institute for Entrepreneurship and Innovation (IES), and NC Rural Center.
- Create Small business Ecosystems
Small business segment ecosystems are built on a common community-specific business infrastructure that caters to different industry needs, facilitating the success of small businesses through resources and support for innovation and collaboration. Building strong partnerships with government agencies, community organizations, and educational institutions is vital for promoting entrepreneurship and driving growth. These connections provide small businesses with valuable support and opportunities, leading to overall community prosperity.
The new small business ecosystem offers a supportive environment with diverse resources, funding options, and networking platforms. Collaboration among entrepreneurs, local businesses, and stakeholders is fostered, creating a supportive network that drives the success of small businesses. This ecosystem collaborates with state business development organizations and local universities to leverage community resources and strengths for better results. Inclusivity and diversity are vital priorities, promoting entrepreneurship among underrepresented groups and ensuring equal opportunities for all individuals.
By educating the community about the benefits of entrepreneurship and the success of its small business members through seminars, workshops, and events, the community can achieve its goals and strengthen its economy.
- Build on the Existing Small Business Foundation
In rural communities, established small businesses provide a strong foundation of expertise, financial stability, and community knowledge that, combined with the right resources, community support, and an entrepreneurial mindset, will enable successful business growth, promote growth through merging into new markets and territories and deliver exponential economic growth.
Their knowledge and experience of the local business community, its opportunities, assets, and challenges can be shared with new and developing small business owners through collaboration.
Supporting the growth of small businesses through an entrepreneurial ecosystem brings substantial economic growth and sustainability advantages. This can be achieved by engaging the local community, providing flexible solutions, and fostering small business growth.
Engaging the community creates a supportive environment and encourages patronage. Offering flexible solutions, such as funding and training, empowers small business owners. Fostering growth leads to economic health, job retention, and diversity in the local economy.
By utilizing the many features of an entrepreneurial ecosystem, the existing small business owner can create additional value for their customers, take their businesses to the next level, stay competitive, and drive growth in the overall business economy’s depth and prosperity.
In Beaufort County, it is estimated that a relatively small growth of 5% in existing small businesses would create up to 500 new jobs and add an estimated $20,000,000 infusion into the local economy. (2020 census data) These new jobs and wages would create multiplier economic effects and possibly create at least another 500 jobs.
- Promote Growth in Community Commerce
Intra-community commerce promotes local economic development by facilitating the buying and selling goods and services within a single community. This approach emphasizes local sourcing, production, and distribution, encouraging residents and small businesses to buy locally and support businesses within their community. By fostering a robust local business ecosystem and promoting revenue circulation within the community, intra-community commerce contributes to the overall resilience and prosperity of the community.
Local community commerce offers several benefits:
It supports local businesses by providing a market for their goods and services.
Fosters relationships between businesses and customers.
Promotes a sense of community and trust.
Allows businesses to have greater control over their supply chain.
Creates a sense of community pride and ownership.
Contributing to an improved quality of life in the community.
This leads to regional economic growth as money circulates within the community.
Implementation of a local community economy requires collaboration between businesses, community residents, and local government officials. Working together makes it possible to create an economy that supports local businesses, strengthens local communities, and benefits everyone involved.
BACKGROUND
Community History
Beaufort County, situated in the eastern part of North Carolina, has seven municipalities – Aurora, Bath, Belhaven, Chocowinity, Pantego, Washington (the county seat), and Washington Park. This county celebrated its 300th anniversary in the year 2012.
The City of Washington, North Carolina, was founded in the 1770s, and it served as a crucial port on the Pamlico River, which connects to the Atlantic Ocean. The city played a vital role in commerce and transportation, primarily due to the shipping industry, transporting goods such as tobacco and cotton,
Washington was used as a supply depot for the Confederate army during the Civil War, and in 1862, Union forces occupied the city. After the war, Washington remained a vital hub for agriculture and industry, with lumber, fishing, and oyster harvesting being the primary industries.
In the early 20th century, Washington’s economy shifted towards manufacturing, with textiles and lumber becoming the leading industries. The city’s location on the Pamlico River provided convenient access to the Atlantic Ocean, making it a fishing industry hub.
Current Business Climate
Recently, a concentrated effort towards revitalizing Washington, NC, emphasizing downtown development, encouraging tourism, and infrastructure improvement has prompted a surge in tourism and increased visibility in the arts and culture scene. Events like the annual Summer Festival play a significant role in attracting visitors from all over the region.
More recently, the local economy now encompasses healthcare, education, and government services as substantial employers. Manufacturing clusters in boat building, woodworking, air filtration, plastics, and chemicals have become major employers.
Although there have been endeavors to create industrial parks and reinvigorate the downtown areas to attract new businesses, economic growth has only replaced the losses from prior economic downturns and disasters. In 2021 manufacturing (2,054) and mining (900 estimated) provided the most significant number of jobs and the highest average wages ($1,376 per week) in Beaufort County.
Despite the recovery, Beaufort County and Washington continue to face difficulties concerning poverty, job loss, and population decline. However, the community remains optimistic about the future and is making concerted efforts towards developing a more thriving and sustainable local economy. 2020 census data and updates show Beaufort County demographics as being:
Population – 47,200, – 960 Square Miles.
19% poverty level, 17% illiteracy rate, 36% obesity.
County Seat is Washington, NC – population of 9,705.
Raleigh – 100 miles, Wilmington – 125 Miles, Charlotte – 275 miles, Greenville 25 miles.
13596-person workforce.
The current Unemployment rate is 3.5% (down from 9.4% in 2021)
There are 39 counties, in Eastern North Carolina, with a total of 18 towns with a population of between 5000 and 15,000. Of the 39 counties, 10 are Tier 1 and 29 are Tier 2, and no Tier 3 counties in Eastern North Carolina.
Beaufort County is rated as a Tier 2 County due to significant investment and wages in the manufacturing and mining sector that distort the rating formula, without which Beaufort County would be a Tier 1 County.
The need for more funding and involvement of the same resources allocated towards small business development in urban areas is impeding the growth and viability of the business economies in rural areas like Beaufort County. Consequently, aspiring and prospective business owners are migrating to urban areas offering better prospects for self-improvement and economic progress. They can take advantage of the resources unavailable in rural NC.
That same lack of funding and support causes small business support to become scattered amongst several local organizations that lack the resources and expertise to effectively provide qualified, timely support to small businesses when needed and leading to a dearth of in-depth knowledge, expertise, and resources related to small business development, which in turn hinders economic growth opportunities, stability, and sustainability within the local business community.
Many rural business communities have the support of Main Street or Downtown organizations, Chambers of Commerce, and other merchant and business organizations, that represent mostly retail and professional business owners, leaving a large segment of the business community, primarily services and trades businesses, without any representation, or opportunity to belong to or gain benefit from being a member of a business community.
Within the City of Washington, downtown, the Washington Harbor District Alliance (lists eighty-two members (4%), and the Chamber of Commerce just under four hundred members (17%) of all businesses. Over 1,800 small businesses are unsupported and underrepresented and need community support and access to resources to support their business ventures.
Beaufort County Business Size Distribution by Employee #
94% of all businesses in Beaufort County have less than 20 employees; those businesses employ 83% of the workforce and generate 79% of the total annual payroll. (2020 census)
Business Community Demographics (2020 Census)
Total Registered and Unregistered Businesses: 2,331
Total Business Workforce: 13,596
Total Annual Payroll: $557,360,000
Number of Small Businesses: 938 – 40%
Small Business Workforce: 9,983 – 74%
Small Business Payroll: $390,000,000 – 70%
Sole Proprietors
Number of Sole Proprietors: 1,270 – 54% of all businesses
Annual Payroll: $51,000,000 – 9% of gross annual payroll