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How Small, Locally Owned Business Affects Sustainability and the Economy

by Marisa Briscoe McNatt (bio)

Published 12/06/11


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This year holiday sales are expected to ring in a total of $465.6 billion dollars, a 2.8 percent increase from the 2010 holiday shopping season, according to the National Retail Federation1. Before heading straight to the nearest big box store for gifts and holiday supplies, consider getting your provisions from locally owned businesses.

Here are a few reasons as to why shopping at the locally owned stores instead of big box stores is beneficial for your community.

1) A Boost for the local economy. Locally owned businesses often purchase from other local businesses, farms and service providers, according to a 2008 study conducted by Civic Economics assessing the impact of local business on the West Michigan Economy2.

Even occasionally shopping at a locally owned store can have a significant impact. Spending your dollars at a local store instead of one that's corporate owned— just one in ten times — can generate nearly $140 million in new economic activity for the local economy, create over 1,600 new jobs and provide over $50 million in new wages, according to the findings from the 2008 study.

"It really makes your dollars work harder for you in the community," says Martin Sorge, Program Coordinator for the Business Alliance for Local Living Economies (BALLE).

An April 2011 study published in the “Economic Development Quarterly” that assessed data from counties across the U.S., found a positive link between small firms that are locally owned and per capita income growth. On the other hand, medium and large firms, such as big box stores and chains, not owned by residents of the community, have the opposite effect, found the 2011 study3.

2) Environmental stability. When shopping at locally owned businesses, you often drive fewer miles, and may even avoid driving. Rather than developing on a city's fringe like large, corporate stores, local business owners tend to locate their shops downtown and in walkable neighborhood business districts, according to UkiahBlog.org4.

Because local businesses are more likely to get their supplies and services from other local businesses, less goods need to be shipped. This means less carbon, sprawl, pollution and traffic congestion.

EcoGreenOffice — a certified, small business based in Boulder, Colo .— is helping to inform others of small, locally owned, green-minded businesses. As an online company, any business or individual nationwide can become an EcoGreenOffice partner upon using the company's green products and services.

Currently, there are over 180 EcoGreenOffice partners. Anyone visiting the EcoGreenOffice site can do a quick search for EcoGreenOffice partners in their area, and find that business’s contact information.

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Working with businesses in your community that have similar goals provides a sense of togetherness.

The Colorado Convention Center, based in Denver, Colo., is an EcoGreenOffice partner. Becoming a partner was one of the Convention Center’s first sustainable initiatives, says Lindsay Arell, the sustainability programs manager for the Colorado Convention Center.

“We started using them in 2008, and they were maybe a year or two old. And, we worked closely with Bryan and we’re able to get that personalized service,” Arell says. Bryan Beckett is a co-founder of EcoGreenOffice.

The Convention Center became an EcoGreenOffice partner not only to support another local business, but also to achieve the company’s environmental purchasing policies, Arell says. For example, the Convention Center has a policy of purchasing paper made with at least 30 percent post-consumer content.

“We are able to do it through EcoGreenOffice,” Arell explains.

3) Keeps your town original. These days, it seems there are Targets, Wal-Marts and Starbucks in every corner of America. In fact, there are five thousand Wal-Mart outlets in the U.S. and nearly two thousand Wal-Mart "Supercenters," according to Michael Shuman in his work, "The Small-Mart Revolution."5

By shopping at locally owned stores, you're keeping your community unique, Sorge says. "The locally owned businesses aren't going to be anywhere else," he says.

Unlike big box stores that take a "cookie cutter approach" because they are sourcing from the same place, local businesses emerge out of the community and figure out what's relevant to that community, says Mickki Langston, the Executive Director for Mile High Business Alliance, based in Denver, Colo.

"They see something different than just maximizing profit," she says.

For example, Colorado has a lot of craft beer, Langston explains.

"There is not a neighborhood in Denver that doesn't have one craft brew beer and that's part of the personality here. And, that's not something you can prescribe," she says.

4) Provides a sense of community. Shopping locally not only enhances the local economy, environment and flavor, but also creates a sense of community.

"When you visit these local businesses, it's more than just shopping. You can sit down with the owner, who is your neighbor too," Sorge says.

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Purchasing products from locally-owned businesses helps the local economy and ultimately you.

Unlike corporate managers who must follow corporate rules, local business owners have control over how their store operates. Owners of local franchises are more likely to listen to customers' concerns and to be more invested in the community's future, Sorge explains.

Also, people working for a locally owned business are more likely to live in the community. This mean they are reinvesting in the local economy in more ways than one, Langston explains.

"They are people living in this context and this community, and they can participate and share. That's just never something that happens when you're starting the franchising for every city in America," Langston says.

Additionally, nonprofit organizations receive an average of 250 percent more support from smaller business owners than they do from large businesses, according to Sustainable Connections6.

5) Ensures entrepreneurship. Entrepreneurship is the act of seeking out what's needed and then creating the space to provide that value, Langston says. Local business entrepreneurs are not only more likely to seek, discover and provide what a community values than a large corporation, but entrepreneurship also creates more jobs, says Langston.

According to a study conducted between 2001 and 2006 by the United States Small Business Administration, employers in the state of Colo. with fewer than 20 employees had a net gain of 118 thousand jobs. On the other hand, employers with over 500 employees lost almost 69,000 jobs7.

Moreover, entrepreneurs get to be visionaries, get to do something new and fill a gap in “a very large machine,” says Langston.

"I think the more and more people get to do that, the more reposed happy and healthy people get to be," she says.

Convinced that shopping at locally owned stores is the way to go? Look at BALLE’s “Shift Your Shopping” initiative, and find locally owned businesses in your area. Between Nov. 1 and Dec. 31, as customers, we collectively spend a large portion of our annual shopping budget.

By shifting holiday shopping dollars to locally owned, independent businesses, our communities will generate 2-3 times as much economic activity than if those dollars were spent at a national chain, says BALLE.

[1] NRF.com
[2] CivicCconomics.com
[3] edq.sagepub.com/content/25/3/277.abstrac
[4] UkiahCommunityBlog.wordpress.com
[5] Small-Mart.org
[6] SustainableConnections.org
[7] SBA.org