How Shopping at Locally-Owned Businesses Strengthens the New Economy

There is power in shopping at locally-owned businesses. Doing so provides a host of extremely valuable benefits to a community, economic and otherwise. And, in the midst of an unprecedented type of economic recession, supporting your local economy is more important than ever. But, why? We are always told to keep our money local, but are we genuinely compelled to do so? Clearly, some of us are, but even more of us are beguiled by the convenience of major chain retailers and online shopping. It’s only human and easy to conveniently dismiss the guilt we feel when adding those items (that we know we could get at the local store down the street) to our Amazon shopping carts. But, it’s not because we’re jerks who don’t care about our communities. Especially since small businesses employ more than 52% of American employees, the problem isn't motivation or intention. Most of us have simply never clearly understood the benefits of shopping with local businesses. Let’s fix that now! 

Keeping The Community Unique 

The uniqueness of a community’s local businesses craft its economic character. When a community champions its local businesses’ originality, it can offer its residence more diverse companies and products. One of the tertiary effects of business uniqueness is that a community becomes more welcoming to diverse individuals and ways of being, which contributes to the sense of pride and self-image of the people who live there. Though the effect are more gradual, communities often even experience a rise in property value when new demographics begin moving in to a community. 

Save Tax Dollars 

A community generates two types of economic activity—revenues and deficits—from a non- residential plot of land. Categories of these land areas include restaurants, hotels, local businesses, specialty retail businesses, and big box retailers, among a few others. According to a study done by Tischler and Associates, big box retailers (think: Walmart and Home Depot) generated a fiscal deficit of -$426 per 1,000 square feet in 2002. However, during the same time frame, specialty retail businesses generated the highest net fiscal result—$326 per 1,000 square feet. One of the primary reasons small businesses and specialty stores generate the best fiscal result is because of the fact that they typically ship goods over shorter distances, which increases their overall net revenue, since they don't have to spend all of that money on transportation. Not only does this either save money or keep the money local, it also contributes to a lighter ecological footprint. Green is good in many different ways. 

Keep Money in the Community 

Most of the time, locally owned businesses purchase their supplies from other local businesses, service providers, and farms. Doing so grows the local tax base and keeps money circulating on home base. A recent study done in Grand Rapids, Michigan illustrates this perfectly. In the study, only $43 out of $100 spent at a global chain retailer stayed in the local economy. Comparatively, $73, out of $100, remained in the Grand Rapids economy in the form of wages, taxes which fund city services, charitable donations, and the purchase of goods and services from other local businesses. 

One-of-a-kind businesses can and should be the corner stone of our local communities, lending a distinctive character to the places we eat shop and, ultimately, call home. Locally- owned businesses create two out of every three new American jobs and have added more than 5.1 million new jobs to our economy since 2003. We may not always find it convenient to remember that big box retailers have practices that negatively impact our local communities on the levels of economy, diversity, and environment. But, those truths are both self-evident and increasingly confirmed through research. And, if we want to capitalize on the golden opportunity that COVID-19 has bestowed upon us, now is the time for reflection about our spending habits and the communities which they will create in the new economy. Once you’ve committed to shopping local, the only thing left to do is act by, for instance, planning an evening at that new, exciting restaurant in town or having a family day at a local DIY candle company. Doing so will help your community to thrive in the new economy, and you’ll feel better (and benefit in other ways) from knowing you’re playing a crucial role in that positive development!