Not too long ago, the city of Memphis was hit by a recession that turned the city’s economy upside down. Home prices slowly plummeted, commodity prices were on the rise, and unemployment was steadily increasing.
Yet a new focus on entrepreneurship and small business is helping rebuild the city and reinvigorate its economy. Both private enterprises and the local government are now working together to fund new startups, which have had a positive impact on the city’s economic development.
Empowering residents and attracting new talent
Helping long-time residents launch their own businesses is one way community stakeholders are transforming Memphis.
“Empowerment is very dignifying, and when people are given the chance to create something they’ll grab it,” Steve Nash, founder and executive director of Advance Memphis, an organization that helps residents turn their skills and ideas into successful businesses, tells Free Enterprise. “People are learning that there is empowerment in starting their own business.”
The faith-based nonprofit works primarily in the city’s economically depressed 38126 zip code, which was hit disproportionately hard by the recession. Since starting in 2014, the program has attracted a large number of participants—their average age is 40—and has so far helped 25 residents launch their own companies. In its latest class, more than half of its students were unemployed before starting the initiative; now more than 70 percent are operating their own businesses either part-time or full-time.
“Entrepreneurship is really meant to help all parties involved, every stakeholder, every community member. It’s supposed to, at its best, give back to its community and that’s what we’ve seen happen,” says Bryce Stout, the organization’s Entrepreneurial Development Coordinator. “We’ve found that after listening to the neighborhood, people didn’t want handouts, they wanted to own their own business and all they needed was help to do that.”
Part of the organization’s goal is to reach out as well as convince locals that entrepreneurship is a valid career option, which is why it makes sure to have local residents on staff and act as board members.
Stout describes one former graduate from the program who initially wasn’t interested in starting his own business, but through a turn of events has become one of the program’s biggest success stories.
“[Donald Jenkins] who was once a hustler has now built his own lawn care business and has even hired other graduates to work on jobs,” he says. “He’s not only uplifting himself but everyone else as well… That really shows how [entrepreneurship] can really transform Memphis.”
It’s organizations like his that are changing the city’s economic landscape by showing residents that small businesses and startups come in many different shapes and sizes and success is possible.
Culture and business provide the right combination
Apart from money, the city’s unique culture is another factor that’s helping it attract new investment, says Jeremy Robinson, 49, the successful founder of JustMyMemphis.com, a digital news site that services the mid-south and city of Memphis.
Unlike other startup hotspots like San Francisco and New York, Memphis has affordable living standards (among the lowest in the country), and a unique music and arts scene, which makes it appealing for young entrepreneurs.
The city’s low living costs coupled with its hard-to-deny cool factor make it the “best place to start a business,” says Robinson. “There is so much to do here. We have culture, the outdoors and an impressive food scene and that’s important if you want people to move here and stay.”
Its low day-to-day costs are also good for entrepreneurs, since they’ll spend less money on living and can channel any remaining cash into new opportunities, partnerships and hiring more employees. “I started my business three years ago, and what I’ve seen is there’s a lot of support from small entrepreneurs who also give back, because it’s a tight-knight community. We help each other out because it’s easy to do here.”
Additionally, the city is home to several corporate head offices, like the Holiday Inn and Auto Zone, that provide ample opportunities for future partnerships and cheaper transportation opportunities.
“The cost of starting a local business here is one of the lowest and best in the country. Rent space is very reasonable, housing is reasonable and the schools are getting better,” says Robinson. “It’s a great place for entrepreneurs who move here, and who later want to start a family, because, let’s be honest, most people want to know that if they settle down somewhere they can stay for awhile.”
Over the course of this year, we’re exploring how entrepreneurs and businesses are faring in non-major U.S. cities, beginning with Des Moines, Iowa. We’ll be reporting on the ground from each city, talking with elected officials and business leaders about how they’re harnessing their unique resources and local talent to fuel economic growth and better compete against more established urban centers like San Francisco and New York City.