I grew up in a small town of about 7,000.

And by grew up in, I mean within 10 miles of that town. I’m missing that country life right about now.

The average public school cost per student in Wisconsin is about $16k. To keep it simple, that means it costs local taxpayers about $208k to put a kid through k-12 public school (not adjusted for any inflation). 

I threw up in my mouth a little while writing that sentence.

So, after spending this ludicrous amount for my education, what did my town receive once I hit my productive years?

Zero.

I did exactly what the system told me to do. 

Do well in school and get a degree so I can get a good job.

That landed me in the outermost suburbs of the Chicagoland metro area.

My town’s taxpayers were forced to pay $208k for my K-12 education and were unable to retain the benefit of my increased productivity.

This is what’s known as brain drain.

Brain drain is the loss of productive labor from small towns like the one I grew up in, to other areas - namely large metropolitan ones.

This is just one reason why small towns and rural communities are shrinking.

And a shrinking community, is a dying community.

The System is Built to Extract Resources

The education system is just one piece that incentivizes this behavior.

Others include taxes, inflation, retirement investments and many more. 

Every single one of these systems are built to drain your local community of its resources and spend it elsewhere.

But today, we’re focusing on how to change that.

I’m talking about using your business to make your life better.

And where is your life?

It’s where you spend 99%+ of your time - Your local area.

Your local area starts with the area closest around you and expands outward.

I’m talking about your neighborhood, your town and your county.

This is where you spend the overwhelming majority of your time. Doesn’t it make sense to focus on improving that area so you get the most benefit?

If you want to be part of the solution that rebuilds the American Economy and gives your kids a higher standard of living, it all starts with your local economy.

And the good news is your business can be the tool needed to turn your town around from dying to thriving. 

There are a few key areas that are needed to accomplish this. 

• A Winning Culture

• Labor

• Capital 

• Productivity

A Winning Culture

Winning has been under attack for decades.

We are born to hate losing. But so many try to change that throughout our life.

Every time one of those loser participation trophies comes out - The hatred for losing starts to wane.

We’re taught not to be a sore loser - The sting of losing continues to diminish.

Instead of feeding our natural urge to compete and win, it slowly dies.

Of all the ways to rebuild the American Economy, developing a winning culture is at the top of the list.

It’s also the most difficult to achieve.

A winning culture is the key to high performance.

And it all starts with you.

I listen to a lot of Andy Frisella content and my number 1 takeaway from him is this.

“Personal Excellence is the ultimate rebellion.”

Personal excellence is all about becoming the best version of you in every aspect of your life.

It’s very difficult - if not impossible - to have a high performing culture in your business if you aren’t a high performer yourself.

How do you become a high performer?

Start putting wins on the board.

That means competing with daily obstacles that are keeping you from your personal goals.

If I want to drop 20 pounds, my daily obstacles are exercise and diet.

Did I get a lift in today? Yes? That’s a win.

Did I walk more than 3 miles? That’s a win

Did I say no to that delicious warm chocolate chip cookie? That’s a win.

Becoming a winner requires competing for wins every single day for the rest of your life.

It’s a simple formula: Accomplish the daily tasks that get you closer to your goals, every day, for a long time.

Simple, not easy.

Personal excellence develops you into a winner. Once you stack enough wins, you become a high performer.

High performers can command high standards and expectations from the people they work with.

High standards, expectations, and accountability drives business performance through the roof.

A winning culture is the first building block for not only your local economy’s turnaround, but the entire American economy as well.

Labor

Developing a winning culture makes the labor problem that much easier to fix.

The labor problem is all about stopping the brain drain from your local community and eventually using brain drain to your advantage.

One of the biggest challenges local communities face (especially rural ones) is brain drain.

As mentioned previously, the system incentivizes this, but why else does it happen?

Lack of opportunities.

It’s a hard pitch to get people to stay somewhere that lacks opportunities. 

I’ve seen this first hand. It’s usually most obvious in the downtown areas (if they have one). One shop after the other closes. No businesses come in to fill the vacancies. And soon half of downtown stores are sitting vacant.

It’s also seen when a large employer moves out of the area or goes out of business. I saw this with a large town in Janesville, Wisconsin. The GM plant there created a ton of high paying jobs - then they shut down. 

All those workers that once had high paying jobs found themselves out of work.

All the surrounding businesses saw their revenues plummet. They shut down too. The entire town’s economy tanked.

Local opportunities for people coming into the workforce dried up. This means people leave to find work elsewhere.

So how can you fight this?

Most people are not entrepreneurs. Yet another casualty from the education system that destroys those thoughts. Most people are employees. They aren’t building their own business. 

Which means jobs need to be created.

Jobs are created from businesses like yours.

That’s why it’s so critical for you to expand your business so you can create more opportunities for people in your communities. Most local businesses have no growth, or worse, are in decline.

It’s much easier to expand existing businesses than it is to start from scratch.

You have a duty to your employees and the community to grow the business.

Why?

Because growth creates opportunities. Opportunities for people coming into the workforce to gain experience. Opportunities for your existing employees to develop skills and progress in their careers.

One of the biggest reasons businesses lose good people is that the business isn’t creating new opportunities for them to increase their skill set and progress to higher level roles. 

They become the big fish in the small tank. 

If they don’t get a bigger tank, they will either cease growing or they’ll leave to find a bigger tank. 

You have to build a bigger tank - Expand the business. 

When businesses expand, they create new jobs and opportunities. Eventually they reach the point of having more opportunities than the existing local labor force can handle.

That’s where you not only stop your community’s brain drain from occurring, but you also use brain drain to your advantage. You start attracting labor from other communities that are failing to create opportunities.

Just like your business, your local community is either growing or dying. 

Capital

Where does the money go?

The system is designed to pull money out of your community.

Whether it’s through taxes, inflation, or retirement and investment accounts, the system pulls as much money out from your local area as possible and spends it elsewhere. 

What’s the best way to fight this?

Taking control of your capital allocation.

I’m talking about where your money sits and where it is spent.

Where Your Money Sits

Local banks and credit unions make money the old fashion way.

They take deposits from their customers/members and lend it out through loans.

A portion of the interest earned from those loans are paid to the customers/members for their deposits and the local bank/credit union takes a portion to run the business.

This is known as net interest margin.

Local banks and credit unions lend out money to the local area. Whether that’s mortgages for homes, business loans for expansion, or start-up loans.

But where does that money go if you’re banking with a big bank, such as Wells Fargo or JP Morgan Chase?

Probably not anywhere close to where you live.

Banking locally means the investments the bank or credit union makes through loans are also local. So instead of your money being lent out to build a mega factory in China, it’s used to expand an existing business or as start up money for a new venture - right in your local area. 

This is money that will help with solving the labor problem we mentioned earlier. Expanding local businesses means expanding local labor opportunities.

I’m not suggesting you switch your entire business to a local bank. But what about a portion? A portion can have a big impact. It can help your local bank or credit union remain well capitalized so they can continue making loans that will have a direct benefit to the local area.

Where Your Money Is Spent

You can have an enormous impact on your local economy by evaluating where you spend your money.

An example here is a restaurant business. Where do you get your food from and why?

Is there someone that provides the same food in your local area? Are they any better or worse than your current supplier?

I evaluate these decisions through the lens of better, faster, cheaper.

There’s usually trade-offs here. If one is better, it’s often more expensive and vice versa.

If the local supplier is on par (or better) than your current non-local supplier - It makes the most sense to switch to the local supplier.

This means more money is staying in the local area. 

Farmer Bob gets an increase in business which allows him to expand his operations, give people higher level opportunities, and hire more local people. 

Just like the amount of money between local and non-local banks, you don’t have to do a 100% switch to a local vendor.

Instead of running 100% of the marketing budget on paid Facebook ads, what if you reallocated 10% of that budget to sponsoring local events within your area? Maybe you hire a local sales rep. How many other spend areas in your business can you reevaluate in the same way?

This doesn’t mean you switch all your business spend from non-local to local just for the sake of it. If you make the switch to a local supplier with lower quality, slower fulfillment, and/or is more expensive, you are destroying your own business.

But if switching to a local supplier delivers the same or even better results than your current non-local supplier - You are creating more value in your business.  You’re also increasing that local business’s ability to expand now that they have increased sales.

I’ll take that win-win scenario every day of the week.

The whole goal is to shift spend where it makes sense. This ensures local businesses are either on par or better than non-local businesses in terms of quality, speed, and price. It makes no sense to shift your spend if those qualities suffer as a result. You’re just setting your own business up for failure by doing so. 

Productivity

Better. Faster. Cheaper.

These are the three value levers in your business.

If you want to stay in business, let alone expand it, you have to drive improvements in these areas.

Solving the previous problems of a winning culture, the labor problem, and the capital problem, makes these improvements much easier to achieve.

There’s three ways to achieve better, faster, and cheaper. All of them involve productivity.

Training, systems & processes, and technology.

A winning culture means the labor you have will want to become better every day. This means they will be open to on-going training to improve their skills and ability to deliver results. 

Walgreens has their own training development program called Walgreens University. Employees can increase their skills to become a store manager or a certified pharmacy technician. This benefits them by training employees exactly how they want them to operate within Walgreens and also increases upward career mobility. More upward career mobility means a bigger tank that your team can continue to grow instead of eventually leaving for greener pastures.

While your business probably can’t afford a full rollout like this, there’s no reason it can’t develop a small scale version.

It’s easiest to take your best guy in each position in your business and formalize a playbook on how they get such great results.

Then training all comes down to pairing the best guy with the new guy. Rinse and repeat.

McDonald’s made their systems & processes simple enough that it can be run by high schoolers. Simplicity is key for consistency. It also means McDonald’s doesn’t have to worry as much about getting highly trained labor since their systems allow just about anyone to run the joint. McDonald’s helps a ton of young people gain their first work experience that makes getting other jobs much easier.

Systems and processes are all about documenting the way you do things in your business. That way when someone leaves, you’re able to keep the ship afloat while backfilling that person.

No business has 100% employee retention. People will leave for one reason or another.

Technology allows labor to become astronomically more productive. Think about how many people it would take to farm the amount of food we produce today without tractors, combines, and all the other technology currently used? That’s a ton of people that wouldn’t be able to use their labor to produce other things we use today. Without increased productivity, everyone is poorer.

Implementing technology is one of the best ways to increase productivity. But you will also need systems and training to get people to use it well. It all ties together.

Better. Faster. Cheaper. 

Success in these areas makes growing the business much easier.

How Singapore Turned Their Economy Around To Become One Of The Richest Countries In The World

That’s great and all but what does this look in practice?

I love using Singapore as a case study for how quickly things can turn around.

This is a country where ⅔ of all its people lived in slums.

Within 10 years, they had nearly zero unemployment and the economy was growing at a massive 13% annually - That means it’s doubled every 5 and a half years or so.

How did they do it?

First, standards and expectations were raised to a new level.

This meant poor behavior was not tolerated. 

Corruption was not tolerated.

Violent offenders were removed.

A winning culture was developed.

This stabilized the country. And a stable country was key to tackle their next problem - lack of natural resources and capital.

That didn’t stop them from finding a way to grow their economy.

While they didn't have any natural resources or capital, they had two things unique to the country - a ton of people (labor)  and a lucrative shipping route.

Since the country was stabilized, foreign companies felt comfortable enough to provide capital to build factories there.

This meant the vast pool of labor now had increased productivity thanks to the factory machinery and other technology. An export economy was born.

The increased productivity meant workers had higher wages. Higher wages meant increased savings. Savings meant there was capital available to invest.

This created a snowball effect. Singapore started with cheap manufacturing and expanded to more complex manufacturing such as chemicals, computer components, ship building, refining oil, and more.

Eventually, tech schools were created, foreign companies were brought in to train workers to increase their productivity even more. The snowball effect just kept building and building.

There’s no reason why the same turnaround couldn’t happen across America today.

Whether it’s rebuilding rust belt cities like Detroit, Cleveland, and St. Louis or rural communities across the country, it all starts with you and your business.

Putting It Into Practice

How to rebuild the American economy with your business:

1. Create a winning culture - Start with yourself and expand it into your business and local community.

2. Solve the labor problem - Expand your business. Opportunities fuel growth. Give people a reason to stay.

3. Solve the capital problem - Evaluate where you hold and spend your money. Shift funds to a local bank or credit union and move to local vendors when the price, quality, and service makes sense.

4. Increase productivity - Better. Faster. Cheaper. Build training programs, systems & processes, and implement technology so your business can deliver the most value to customers at reduced costs.

Rebuilding the American Economy isn’t done overnight. It’s done every single day for a long time. As seen in the Singapore example, it can happen within 10 years when the above solutions are implemented.

It all starts with you and your business.