Main Street districts thrive during COVID-19 pandemic, 'opening businesses like crazy'
Main Street districts across the country are seeing great success despite the COVID-19 pandemic, supply chain issues and worker shortages impacting American businesses.
“There were 3.5 million more businesses that were formed in 2020 than in 2019,” said Kathy La Plante, senior director of coordinating programs for Main Street America. “That’s why we’re seeing net gains in all our communities. We grew by 48%.”
Main Street America saw a trend across the country that rural towns and small towns typically had fewer businesses closing, she said.
“Along with that, business applications took a dramatic jump. People were opening businesses like crazy during COVID,” La Plante said.
Although more business openings were seen in rural towns and small cities, La Plante said, central business districts in urban areas declined.
“Places like Boston and San Francisco saw declines,” she said. “Those downtowns have a lot of offices, and people were not going to work. So the restaurants had no customers, and the same thing with the retail side — if there was nobody in the downtown, they were not coming in.”
Local entrepreneurs are at the heart of business growth
Most new businesses — about 70% of them — were started by local entrepreneurs and not from the recruitment of outside companies, La Plante said.
That figure grows to about 74% in older commercial areas, such as Main Street districts.
La Plante encouraged Iowa’s Main Street staff to look closely at their communities for home-based businesses that might eventually become a storefront.
Ames Main Street’s Life Distilled modern apothecary is an example of a business that started as a home-based enterprise and grew into a downtown storefront. Owner Jenny Pollard opened her store at a prominent location on the corner of Kellogg Avenue and Main Street in November 2021. She started her business out of her home in 2017, with an Etsy store and a presence at area pop-up markets such as Beautiful Land Market and Locally Grown Showcase.
Laura Severson, owner of Chase + Charlie, creates handmade, super soft teddy bears, lambs and ragdolls. The home-based business's products are sold at Creative Endeavors, a storefront in downtown Story City that opened in 2021.
Business word of the year in 2020: pivot
"Pivot was the word of the year for business owners in 2020," LaPlante said.
Savvy, agile, entrepreneurial organizations and small businesses that are able to recognize and leverage these shifts are in a better position to be resilient and prosper, she said.
According to American Express’ Entrepreneurial Spirit Trends survey of 1,000 small businesses, 76% of those polled have pivoted or are in the process of pivoting since the pandemic, La Plante said. Among those, 73% expect to pivot again in the next year.
Those pivots include things like curb-side delivery and a greater use of online stores. Many restaurants that didn’t offer take-out or delivery before the pandemic have made it a part of their business models.
“Still, we have a lot of businesses that are not using e-commerce, and that’s an area they can build on,” La Plante said. “It creates a bigger market for a business.”
Sales on Etsy, an online market for artisans’ handmade goods, grew by 147% during COVID, she said.
“People were stuck at home being creative, and even people who had art galleries were closed down for a time. But they were able to sell on Etsy,” she said.
In April 2020, less than 30% of Main Street businesses had an online presence.
“Even if you don’t sell online, you should have a presence,” La Plante said. “You should be there on social media or have a website so that people can contact you or see what kind of products you have.”
She recommended businesses use Shop Iowa, a website that promotes Iowa products online.
“They do a lot of marketing for that, and any businesses that want to get on the Shop Iowa site still have a year to be able to do it for free,” she said.
Main Street districts get big return on investment
Main Street America is a national program that focuses on revitalizing historic commercial districts. Main Street Iowa is the state level of the organization, and individual communities can create their own Main Street districts, such as Ames Main Street.
A resident of New Hampshire, La Plante spends about eight weeks a year in Iowa. In April, she toured the Main Street districts in Ames, Story City, Nevada and Jewell.
There are 46 states in the Main Street program.
“We’re trying to get more states involved in the program,” La Plante said. “Some had them and they went away.”
When La Plante talks with communities about starting a Main Street program, people often point to the associated costs as a deterrent.
“You need to hire a Main Street director and you’ve got to have a budget to do projects, and they say, ‘We can’t afford it,’” La Plante said. “But I say you can’t afford not to do it because this is an investment in your community. You put a little in and you’re going to get a lot out.”
“For every $1 that a municipality invests in a Main Street program, we’re seeing a return on investment of just over $30 for the private sector,” she said. “We claim to be the best economic development program going on in the country.”
Main Street offers incentives like facade grants, where the building owner might get a $5,000 grant and then end up spending $50,000 on their building.
“The small incentives can have a big impact,” she said.
When La Plante was an executive director of a Main Street district, she organized a Christmas parade that drew about 10,000 people to her city that had a population of 13,000.
“We had a bookstore move to downtown, and the owner wanted to be there because more people would walk past her door in that one night than in three years in the strip mall,” La Plante said. “Main Street sets the tone and the space for giving confidence to people to reinvest in downtown.”
Main Street personnel will promote Small Business Saturday, plan community events, work with property owners and try to recruit new businesses. La Plante has seen businesses that were specifically looking to locate in a Main Street district. She once had a housing developer choose a community because he knew the organization would help his efforts.
“They’re advocating for you, and that just raises confidence levels for investors to come into a district,” she said.