(This week’s civic education and engagement column from Danville’s The Republican newspaper.)
Anytime one of those godawful social media chatter sites posts an announcement that a local business is closing, you can count on a quick firestorm of angry comments. And you can also count on a large share of those commenters blaming local government for the company’s demise. Yet blaming local government overlooks a much more basic reality: businesses usually close for business reasons.
That’s not to say government decisions can’t have a negative effect on businesses. It does happen – whether that’s parking requirements franchise owners consider too restrictive, or prohibiting certain types of businesses (like massage parlors) – but rarely is local government to blame for a closing. At times, business owners will ask local leaders to bend a rule or two to make their project easier or cheaper. When those leaders refuse, the angry owners may make a lot of noise. But let’s be honest – if you’re willing to bend the rules, why bother having those rules in the first place?
What causes most local businesses to fail? Usually, it’s the marketplace or the business itself. Whether your new business disappears quickly or lasts for generations depends primarily on how well it’s run, how well it’s funded, and how well it delivers what community residents or other businesses need. When you hear someone gripe because one of the stores in your community closed down, ask about how often they patronized it. “Oh, I never went in there.” I’ll suggest they’re not the only one.
There’s no polite way to say this, but some businesses are just bad ideas. You love liverwurst and wish you could access the world’s best. You’re certain an imported liverwurst store would be so busy that you’ll start selling franchises. I don’t think you could blame your town for that inevitable disaster.
I’ve watched a lot of businesses come and go, and they’ve departed because of a lot of different business-related reasons. Failure to understand accounting (or heed the counsel of CPAs or attorneys) is one of the biggest. Nobody wants to return to a restaurant or hardware store where the service is remarkably rude. Bad management is an obvious one – can’t tell you how many times I’ve watched the way a manager has talked to employees and thought it explained everything. The economy can be a culprit, but the businesses that are most affected by a downturn tend to have problems like those I’ve mentioned.
One other thing most Hendricks County residents don’t understand about businesses is that town leaders don’t get to pick and choose which ones come to their community. You may think your town council is a bunch of idiots because they still haven’t brought an Olive Garden to your favorite shopping strip. You may assume that county leaders don’t care because there’s no Trader Joe’s. You may think those leaders must be on the take from the rubber industry because it seems like another tire place (or mattress shop) opens every couple months.
The businesses decide which towns they want to call home, not the other way around. Yes, new businesses often have to go through a formal process to make sure what they’re building conforms with the community’s zoning laws and building codes – but that’s not generally a process where town leaders simply decide who they want and who they don’t. If an auto service facility is a permitted use for a particular piece of land and another tire store wants to build there, local officials can’t reject it simply because residents would rather have an Olive Garden.
Ever wonder why tire stores, mattress shops, car dealers, and certain other types of businesses seem to cluster around their competitors? Think that might have something to do with the number of people who comparison shop for what they sell?
The next time a favorite local business closes, it’s perfectly reasonable to be disappointed. But before blaming the town council, remember who really decides whether most businesses survive: the people who own them and the customers who either walk through their doors – or don’t.