The Effect of Small Business on the Local Economy
Mark Fielding
Independent Non Exec Director - Helping business owners succeed - SME Expert - Speaker - Mentor - Business Adviser.
Small business and the Local Economy Mark Fielding
By shopping locally you’re directly putting money back into your own community.
When you shop at small local businesses, your euros stay within the local economy, helping to improve the local community as a result. Likewise, small local businesses tend to buy locally as well, pumping more of their money back into the community helping with economic development much more than their large chain store counterparts.
When a consumer buys locally, much more of that money stays in the community. In fact, studies have found that for every €10 spent at a local business, €7 remained locally while only €4 of each €10 spent at a chain retailer.
Local businesspeople tend to support other local businesses, patronizing local establishments for both business and personal reasons. On the other hand, large chain businesses tend to get their supplies from HQ and employ store managers and employees that aren’t as personally invested in buying local.
Many small business owners often come together to form casual and formal relationships. These relationships are also often a key tool for referring custom between business owners, so that as custom in one business increases, other nearby businesses benefit through increased exposure and word-of-mouth referrals.
So, in addition to contributing to the local community’s unique identity and being involved locally, small businesses build a sense of community and increase the economic wellbeing.