Roadwork can really hurt a storefront business but owners are finding ways to maintain sales and customers.
If you own a business on a busy street, you may have faced the good news/bad news scenario of major construction. Long term, better transit will bring more customers. Short term, it can drive them away. Your challenge is to keep sales thriving until the project ends, usually behind schedule.
You're not alone if a bulldozer is outside your doors. The 2009 American Recovery and Reinvestment Act – designed to stimulate the economy – included a large injection of construction funds. A new wave of public works projects has put a new term on the lips of public officials and business groups: construction mitigation.
'Construction mitigation refers to the measures that cities take to counteract the negative effects of construction,' says Bo McCready of the University of Wisconsin's Robert M. La Follette School of Public Affairs, which surveyed 40 cities on the subject. 'Public works projects can seriously disrupt business activity and construction mitigation is designed to help businesses through what is often a very difficult period.'
For business owners, that means being proactive and not reactive. Don't squander precious funds on suing City Hall or contractors. After all, the word is mitigation, not litigation. And in some cases, you may be able to get those guys to spend money on you. Here are seven tips to help avoid roadwork rage.
1. Be informed ahead of the curve.
Governments should notify businesses about pending construction well in advance. The Chamber of Commerce and other business associations also are good sources, especially if you're already a member. But don't count on them completely. Make it a habit to spend 15 minutes once a week checking city, county and/or state Department of Public Works and Department of Transportation web sites, where such projects are always posted.
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2. Build a dedicated cash reserve.
The reality of construction is that your walk-in sales are likely to be cut. Who wants to weave around sidewalk ramps or no longer find a parking spot right out front? You'll also probably need more advertising and promotions to sweeten the shopping experience. So once you learn a roadwork project is scheduled for your area, start setting aside funds.
Before a road-widening project hit the Hillsborough Street area of Raleigh, North Carolina last year, Mike Ritchey, owner of Global Village Organic Coffee, assumed the worst. 'When I looked at the way the city of Raleigh had handled past projects and saw the number of small businesses that went under,' he says, 'I knew I had to build up a war chest.' So Ritchey used the preceding fall and winter months – when students at nearby N.C. State University are in full flood – to start saving.
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3. Form alliances and pool resources.
When New York City re-launched construction of its Second Avenue subway line, merchants along the avenue at first tried to cope individually with the noise and mess that drove customers away. Then they formed the Second Avenue Business Association.
Two things happened as a result. They spoke with a unified voice to local politicians, which always command greater attention. And they began to brainstorm together. 'We came up with new ideas instead of complaining,' said Joe Pecora, president of the Second Avenue Business Association and owner of Delizia Ristorante & Pizza. 'If we all work together, we can all benefit from it.'
The other alliance you should strengthen is with your customers. If you haven't already started a customer loyalty rewards program, this is a good time to do it. Ditto establishing connections via social media like Facebook and Twitter. 'Product is only one piece of the marketing mix if you don't have the ability to get people parked and into the shop,' says Ritchey. 'We did specials and all sorts of loyalty programs designed to keep customers coming back.'
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4. Use a group web site to market and communicate your presence.
Many busy individual business owners never get around to setting up individual web sites. New York's Second Avenue business owners decided to spend $200 to build a group web site, www.2ndavenueshopper.com, which provides discount coupons, announces specials and sales and posts construction updates for visitors. It's shrewdly linked to established neighborhood web sites, allied civic organizations and political representatives. It's also updated on a daily basis so it feels live.
At the very least, a web site reminds people that you're still there; used the right way, it can become a driver that helps offset lost walk-in business. The beauty of a group web site is that it requires only a little input and a little dough from each participant while helping maintain the idea of a shopping district.
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5. Ask the government in charge if it has a construction mitigation program.
The University of Wisconsin researched exactly how they help businesses during construction. The study revealed that only eight provide direct cash or loans, but it turns out there are many other forms of assistance.
For example, some cities relax zoning laws to permit business signs in places normally off-limits; others relax parking requirements. Sacramento, California requires contractors to provide signs noting business are open and accessible. Grand Rapids, Michigan underwrites business-specific construction-based advertising up to $500, while San Jose, California subsidizes sale discounts. Taking enterprise a step further, the city of Green Bay, Wisconsin entered all visitors to traffic-affected businesses in a raffle for a big-screen TV.
'It is my impression that cities recognize that it is easier and often more politically sound to help retain an existing business than to encourage a new business to move in,' McCready. 'In these difficult times, cities may become even more interested in helping their existing businesses succeed so they can maintain their tax base.'
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6. Make friends with the construction contractors and crew.
Some days, you may want to sabotage their jackhammers. But they're often your most reliable source of information, and there's something strangely calming about knowing the worst. You may even be able to enlist these folks in your cause. Earlier this year, the Second Avenue Business Association successfully petitioned the construction company Skanska for $3,000 to create 10,000 special-edition shopping bags.
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7. Utilize the media, carefully.
Being the put-upon little guy doesn't work in your favor if you don't craft your message properly. When Raleigh's Hillsborough Street construction project dragged on, Phil Skyes, manager of Red, Hot & Blue, called a TV station to suggest a story about businesses still being open. Instead, as he told the Raleigh Public Record in November of 2009, "The next week they did a story on how people should avoid Hillsborough Street." The restaurant closed a few months later for lack of business.
Three thoughts to keep in mind when contacting or dealing with the media. If possible, choose one articulate spokesperson to represent your group. Don't generally complain about the situation; be specific about a problem or violation (if one exists) and suggest solutions. And don't call or email a news organization every week expecting coverage – choose your few story opportunities selectively.
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