The impact of supporting local businesses is greater than shoppers might realize, business experts say.
When people buy goods and services from local businesses – whether that’s a mom-and-pop clothing store, a family-owned restaurant or a local plumber – much of the money they pay stays in the local economy, helping other businesses grow and putting money back in neighbors’ pockets, business experts said. With the holidays mere weeks away, small businesses are in the economic limelight.
“The message is clear: communities that support their business base are communities that thrive,” said Kelly Hall, president and CEO of the Longview Chamber of Commerce.
East Texas is filled with small businesses, which can be any business with 500 or fewer employees, according to federal guidelines. Nationwide, about half of all jobs are at a small business of some kind.
For each dollar spent at a local business, about half of that dollar stays in the East Texas area, said Jeff Sims, an associate professor of economics at Kilgore College. The amount of money that remains local is smaller when people purchase goods at larger outlets with headquarters elsewhere – about 10 to 15 cents of every dollar.
Businesses owned, operated and staffed by local people provide livings for local folks, and supporting those businesses helps build relationships and culture, Sims said. Small businesses face a number of economic and financial struggles, and increased local support would be of great benefit to the men and women of the small business community.
“If we can provide some more stable income at the local level, it makes at least our corner of the world feel a lot less scary,” Sims said.
Sims suggests that East Texans should consider one way they can support local businesses each week. As the holidays draw near, he encourages people to purchase gift cards to local shops, restaurants and more.
“Instead of just picking up one of those national chain cards,” he said, “if we’re just a little bit more purposeful and choose purposely what local business we would like to support, that really is without very much effort a substantive way that we … would make a big difference for these local leaders.”
Supporting local businesses not only helps small businesses grow; it also helps local governments provide the services people need. State sales tax revenue funds state and local government operations, infrastructure projects and more, Sims said.
“This isn’t just a sound bite: Shopping locally really is a way that you can invest in your local schools and roads and have an impact that makes a difference,” Sims said. “It’s one of those things that we can do as consumers voluntarily to really make substantive change in our area.”
At the UT-Tyler Longview Small Business Development Center, helping small businesses thrive is the name of the game. People who’ve successfully run their own small businesses are available to advise entrepreneurs about starting their own, and they often help small business owners who face big challenges – even if their businesses are on the verge of closing, said director Day Shelmire. The organization serves six East Texas counties and is part of a nationwide network.
Though big corporations attract lots of attention, they wouldn’t be able to operate without the support of many smaller businesses, Shelmire said. In Longview’s case, larger businesses move here, in part, because there are smaller companies that can provide services and products to them and their workers. Employees need food, childcare, education, healthcare and more – all services that small businesses provide.
Local business owners and employees take their earnings and reinvest them in the community, supporting other businesses and keeping the economy circulating. Most small businesses in East Texas have five or fewer employees, and larger ones have between 25 and 75 employees, Shelmire said.
Shelmire encourages people to buy goods and services from local companies when they can. Though he buys goods online, he likes shopping at local establishments that can provide expert advice. For example, if he’s buying a bicycle, he’d rather buy one from a local store staffed by professionals – who can tell him the best bike for him — than purchase one online without personalized service.
The growth of online retail has been generally negative for small businesses, Shelmire said. Large retail websites have put many small outlets out of business. But that environment has made small businesses more competitive and innovative.
“The successful local businesses have figured out how to provide additional value that you cannot get online. And they’re the ones that thrive,” Shelmire said.
Shopping locally and paying for local services is “extremely important,” Shelmire said.
“If you need to buy something from Walmart or online, go right ahead,” he said. “But you’re going to find a lot of businesses here locally that are going to give you a lot better service that would love to have your business.”
And: “You’ll be glad you did,” he said.