The Entrepreneurial Impact of Asheville s Outdoor Special Events
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1 The Entrepreneurial Impact of Asheville s Outdoor Special Events For the City of Asheville By SYNEVA Economics & Chipley Consulting Funding & support provided by: Appalachian Regional Commission Land of Sky Regional Council Presentation to the Asheville City Council October 03, 2017
2 Study Goals: What benefits do Asheville s outdoor events provide to participating businesses? Can those benefits be quantified? Are there any actions that can be taken to assist these businesses and integrate them more fully into the City s community and economic development efforts? 2
3 Methodology: Online Survey of Event Vendors In-person Interviews (event vendors & organizers, support organizations) Research of Academic Publications & Studies 3
4 Key Finding: Exposure & Marketing is the top benefit outdoor events offer, not onsite sales at events 4
5 Key Finding: The exposure & marketing benefit aligns with the shift of small and midsized firms away from traditional marketing to entrepreneurial marketing strategies. Events offer the perfect venues to practice. 5
6 Quantifying the Benefit: Existing research indicates that businesses that participate in face-to-face, outdoor direct-to-consumer marketing enjoy an estimated annual sales premium of 3.9 percent over similar businesses that do not. That translates, conservatively, into an annual $2.7 million sales premium to local event vendors. 6
7 Quantifying the Benefit: The $2.7 million sales premium earned by local event vendors has an annual local economic impact of: 54 local jobs $1.5 million of income $2.0 million in raised economic activity $515,677 tax revenue generated ($16,305 to the City) 7
8 Recommendations: Actions that can be taken to assist these businesses and integrate them more fully into the City s community and economic development efforts: Step 1: Create a Place to Identify Event Vendors & Facilitate Networking Step 2: Integrate with Community & Economic Development Efforts 8
9 The Entrepreneurial Impact of Outdoor Special Events A City of Asheville Research Study Syneva Economics Chipley Consulting Funding and support provided by: Appalachian Regional Commission Land of Sky Regional Council
10 Objectives 1. City of Asheville 2. Study Motivators 3. Revenue Structure 4. Stakeholders 5. Study Details 6. Findings of the Study 7. Recommendations 8. Recap
11 Asheville, North Carolina City Population 92,000 / Daytime + 50% (Buncombe County Population 255,000) Land Area 45 Square Miles / Elevation 2,100 Urban Hub of Western North Carolina Median Home Value $210,000 Median Household Income $43,000 Healthcare, Hospitality & Public Services UNC at Asheville & AB Technical College Asheville Regional Airport
12 Accolades 7th fastest growing small U.S. city, according to WalletHub, 2014 Forbes ranked Asheville #12 among the Best Places for Business & Careers in 2015 Ranked one of the best mid-markets in the South to relocate headquarters by Southern Business & Development in 2016 #2 Best Startup City in America by Popular Mechanics
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14 Legacy of a Whitetail Deer Hunter Three Billboards Outside Ebbing, Missouri Masterminds Dirty Dancing (ABC TV Remake) The Hunger Games
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16 Why? 1. City of Asheville 2. Study Motivators 3. Revenue Structure 4. Stakeholders 5. Study Details 6. Findings of the Study 7. Recommendations 8. Recap
17 Qualitative Motivators for the Study Community interest in local supply and resource chain Vendors moving from home/temporary to brick and mortar Event organizers opening small businesses Demand for additional events with vending opportunities City Manager moved the special events office under CED
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23 Moonlight Makers
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25 Buchi Kombucha
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29 AS AN ENTREPRENEUR, WHAT ROLE HAVE OUTDOOR EVENTS PLAYED? I wouldn t have felt comfortable opening a shop without running the local market first. I am super thankful that it went well enough at the market to open a shop. While I now have a shop in Black Mountain, I have more fun standing at the market, meeting tourists and interacting with my family of vendors. -Chelsea Morning, Shop Owner & Market Organizer
30 Money matters City of Asheville 2. Study Motivators 3. Revenue Structure 4. Stakeholders 5. Study Details 6. Findings of the Study 7. Recommendations 8. Recap
31 North Carolina Department of Commerce Income Tax Corporate income tax: 3% Personal income tax: 5.75% (flat rate) Sales Tax (7%) State: 4.75% Buncombe County: 2.25%
32 City Revenue Sources Cities can rely on revenues that are authorized by the State. These include property taxes, sales taxes and fees. Buncombe County is one of a handful of counties in North Carolina that generates more overall revenue than it receives. -Mayor Esther Manheimer Property Taxes Fees for Service Sales Tax Intergovernmental Tax Permits Parking Fees Miscellaneous & Investments
33 Revenues not received by the City of Asheville Property and Sales taxes are Asheville s primary source of revenue which is used to pay for core services such as Police, Firefighting, and Parks & Recreation Hotel Room Tax Food & Beverage Tax Business License Fees Impact Fees Traffic Ticket Fees (7% Sales Tax)
34 What is the return on investment with special events? Thinking you know is not knowing.
35 Economic Development & Special Events Improving the economic well being of a community through efforts that entail: Job creation Job retention Tax base enhancements Quality of life Special event alignment with City of Asheville revenue: Sales tax (.35 on every $100 spent) Tax base enhancements = entrepreneurship in tourism-heavy economy
36 The Study 1. City of Asheville 2. Study Motivators 3. Revenue Structure 4. Stakeholders 5. Study Details 6. Findings of the Study 7. Recommendations 8. Recap
37 Land of Sky Regional Council LOS Regional Council is a multi-county, local government, planning and development organization that provides technical assistance to local governments and administers projects and programs which benefit the region s citizens. LOS Regional Council is one of 16 regional councils across the state of North Carolina.
38 Appalachian Regional Commission The ARC is a United States federal-state partnership that works with the people of Appalachia to create opportunities for self-sustaining economic development and improved quality of life.
39 Study Project Partners
40 How & What 1. City of Asheville 2. Study Motivators 3. Revenue Structure 4. Stakeholders 5. Study Details 6. Findings of the Study 7. Recommendations 8. Recap
41 Methodology Surveys Individual Interviews Four key components: Focus Groups Research of Academic Publications & Studies
42 Study Results Annual Revenue 29.5% earn greater than $200,000 per year (highest category) 11.4% earn $0-$10,000 per year (smallest category)
43 Study Results Outdoor Special Event Participation in Asheville 27% participated in one event in the past 12 months 42% participated in 2-5 events per year 3% participated in 25 or more events per year Average Vendor Fee: $100 (but as low as $15 - high of $375)
44 Study Results Employment Size Results challenge a common perception that most event vendors are self-employed, one-person operations. 40% of vendors have 2-4 employees 19% employ % employ % defined as self-employed with no employees
45 Study Results 32.8% over 10 years Business Age How long have vendor businesses been in operation? 11.8% for 1 year or less Between 2-9 years relatively evenly distributed across respondents
46 Study Results Why Participate? Exposure & Marketing Onsite Sales Introduce / Test New Product or Service Very Important Somewhat Important Not Important Exposure & Marketing is the most important benefit offered to vendors by 90% Onsite Sales garnered a lower total percentage response at 57.8%
47 Study Results Onsite Sales Revenue Relatively minor role of onsite sales was confirmed by majority of vendors. Yet 20.7% report to earn more than half of their annual revenue onsite. 56% earn just 0-10% of annual revenues at outdoor events 20.7% earn >50% of annual revenues at outdoor events
48 Study Results 66% within Asheville municipal boundaries Location of Vendor Businesses 13% within Buncombe County 21% outside Buncombe County
49 Study Results Vendors by Major Industry Classification No single major industry classification represented more than 20% of vendor businesses.
50 Findings 1. City of Asheville 2. Study Motivators 3. Revenue Structure 4. Stakeholders 5. Study Details 6. Findings of the Study 7. Recommendations 8. Recap
51 Chief benefit was Exposure & Marketing Develop personal relationships with potential customers Provide individualized product/service information and demonstrations Collect direct and immediate feedback Practice and improve customer relationship skills Collect customer information for future marketing Increase self-confidence by practicing sales activities Directly observe competitor products/services, marketing strategies and pricing Develop business networks with other vendors
52 Small and midsize firms identified to be shifting away from traditional marketing toward entrepreneurial marketing strategies, and using events to deploy. Incorporates elements of entrepreneurship Proactivity, opportunity, risk taking, innovativeness Incorporates elements of marketing Customer focus, resource leveraging, guerilla marketing, value creation
53 Newsworthy Western North Carolina businesses are making a name for themselves in the American music festival scene. Styled after the musical festivals of the 1960's, Bonnaroo becomes the center of the Bohemian south every June. The event gathers an eclectic collection of musical and stage performances, panels on social activism, and hundreds of vendors from across the United States...many of which hail from Western North Carolina.
54 ...attending festivals was vital to the success of their brands.
55 $2.7M Sales Premium 500 local vendor group generated $68.3M in annual sales +3.9% annual premium over businesses that do not participate in face-to-face, outdoor direct-to-consumer marketing = 39.1 jobs directly, and 15.3 jobs indirectly, $1.48M income & $2M in added value per year = $515,677 in annual tax revenues (City receives $16,305)
56 Integrating Events into Business Development Ecosystem Create a System to Identify Vendors & Facilitate Contact Vendor Registration & Directory Bridge Resource Gaps Promote Communications to and BETWEEN vendors Networking Events Social Media Integrate with Community & Economic Development Efforts
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58 Bottom Line If we can identify the pathway of how businesses grow and develop using special events, and show how that generates revenue for the City, we can then restructure, reallocate, and focus our energies on supporting small business development.
59 To do list: 1. City of Asheville 2. Study Motivators 3. Revenue Structure 4. Stakeholders 5. Study Details 6. Findings of the Study 7. Recommendations 8. Recap
60 Recommendations Develop Policies & Incentives Around Performance Priorities Create Innovative Programs & Infill Support Infrastructure Communications Lead: Opportunities, Grants, Focus Groups Training Lead: Boot Camp, Coaching, Mentoring Financial Services Lead Environmental Health & Human Services Lead
61 Recap 1. City of Asheville 2. Study Motivators 3. Revenue Structure 4. Stakeholders 5. Study Details 6. Findings of the Study 7. Recommendations 8. Questions?
62 Questions & Comments? Jon Fillman, CFEE Economic Development Specialist - Special Events City of Asheville PO Box 7148 Asheville, NC Office Mobile jfillman@ashevillenc.gov
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