Impact Your Local Economy By Supporting Local Small Businesses

November – December, 2020 Volume 17 — Issue 98

Aannndddd… the pandemic continues. Just as we started to see some economic recovery in the third quarter, another COVID uptick began. Every time there is a new uptick, state leaders create new ways to lock down our world. Small businesses that received no financial assistance or ability to open back up are feeling the pinch again. We don’t need to feel helpless and hopeless as we begin the holiday season. Each of you has the ability to impact your local economy by supporting local small businesses. It is possible!

My thoughts began around how small businesses have suffered or completely died from shutting down our economy for so long. The hope, just six weeks ago, was things were opening up and getting better. And, what we, as individuals can do to help stimulate the economy in our own areas. Many have done what they can to help people in need over the past ten months. During this season of thanksgiving, gratitude and generosity, we have the ability to impact our local economy.

This time of year most people routinely take on giving and sharing to help the less fortunate. Gifts are given to families and children we do not know. Checks are sent to local, national and global charities to support their efforts. Toys are dropped in bins and cash into red kettles as warmth for humanity and spirit of giving abounds. This year, however, will be more important than ever to support local businesses and economies as we shop for all things related to year end religious and cultural holidays.

How we impact local economy and small businesses

Simple: shop locally to help small businesses survive and grow. The more money spent locally, the more opportunities are provided to help your local economy to recover. A recent post in the Alignable blog discussed how shopping locally this holiday season could have a big impact on local economies.

3 Effects of Shopping Locally

The author interviewed Derek Peebles, Executive Director of the American Independent Business Alliance (AMIBA). Peebles shared that shopping locally does far more for the economy than feed revenue into a few small businesses. He pointed out benefits that come from what he calls a local multiplier effect of shopping at local businesses. This effect takes on three types of benefits for local economic situations. The three levels of effects of locally spent money are:

Direct effect of shopping locally

Any small business owner knows how incoming funds affect their business. Revenue helps pay rent and utilities, purchase inventory and materials. That same income from sales pays salaries and employee benefits, for marketing and everything else it takes to maintain and grow a successful business.

Indirect effects of local shopping

When the owner of a business spends some of the money taken in at other businesses, an indirect effect impacts the local economy. On one level, when the small business owner pay his bills, there is an impact on other local businesses. (Think: Businesses need to shop locally too.) Ordering printed marketing materials, office supplies, computers and furnishings for their offices circulates funds around town to other businesses, improving the local economy.

Induced effects of shopping locally

A business owner spends his own salary, his employees do their local shopping and local suppliers spend money too. All of that economic activity induces a boost in the local economy. Think about it: the original amount spent at just one local small business induces spending by many individuals.

According to Mr. Peebles, the economic impact of local shopping can’t be ignored. He cited a study that found for every $100 spent at a local independent business, $45 of secondary local spending is generated. Spending that same $100 at a big-box chain store results in only $14 available for secondary local spending. Which option sounds best for positively impacting your local economy and small businesses?

8 Ways to shop locally and support your local economy

Buy gift cards. If local restaurants or shops are open, but you are cautious about going out during the pandemic, buy a gift card. If you don’t use it now, it will be good later on. The variety of gift cards is nearly endless, so they make great gifts for the holidays too.

Shop your local business websites. There are so many ‘non-essential’ businesses unable to open for business. That doesn’t mean they don’t have a website with new, innovative products and services to purchase. Gyms are closed in many areas, but some have created online, virtual classes. Sign up for classes you can attend from the comfort and safety of your home.

Pay cash. Credit cards are a convenience we have all grown accustomed to when making purchases. They are convenient, yes, but they carry hefty interest rates for consumers. And, they carry a hefty fee from credit card companies for struggling small businesses. For instance, accepting payments via PayPal can take nearly $100 from a $1,000 purchase.

Shop your local food sources. Instead of relying on chain grocery stores for food, remember local meat shops, vegetable markets or bakeries for some of your food essentials. Not only will you take home fresher, but healthier natural foods for your family. While not staples, don’t forget shopping at local candy and nut shops, coffee and tea shops for entertaining and gifts. And, wine from a local winery or craft beers from a local brewery make great local gifts too.

More Ways to Support Local Businesses

Support your local salons. If you get a haircut once a month or highlights done every couple of months, schedule and pay in advance. Likewise, the same goes for nail salons and barber shops. Buy someone a gift card for a salon treatment after the holidays. If you are lucky enough to get inside a salon, over tip those serving you. With fewer customers, most salon professionals serving you are making less money.

Support locals’ online services. Give a shout-out to local businesses online. Post a great review for them on sites like Yelp or Google. Or, post something on your and their social media pages to help drive traffic to their location or website. It is easy to do and costs absolutely nothing, but the value to their success can be immense.

Give Referrals. Ask your local businesses for some of their business cards. Pass them on to family, friends and colleagues. Urge them to support that local business. Again, this costs you nothing but a few kind words.

Tip servers big! If your lifestyle is anything like at our home, we eat out quite a bit. Over time, you start frequenting a limited number of restaurants. Staff gets to know you, what dishes you order and how you like them prepared. They provide more than ‘standard’ service. Don’t spend time calculating a standard tip – tip big. They go the extra mile for you every time you walk in. Remember, do the same for them now when times are tough.

Conclusion

Have you thought of other great ways to support your local businesses through this pandemic? If so, please add them in the Comments area below. Needless to say, we can all do something to help local businesses while affecting our local economy.

As we enter the year end holiday season, I wish the very best to you and your families. We continue moving forward in these very unusual and highly stressful times. All this said, fingers are crossed that vaccines come out very soon as we move into 2021. Be safe, be well and take care of those near and dear to you.