Why Local: Economic Impact
Why Local: Economic Impact
The economic benefits of putting your money in Locally-Owned, Independent Businesses
The economic benefits of putting your money in Locally-Owned, Independent Businesses
On our last blog we introduced the different types of local businesses, and the five reasons why we focus our support on Locally-Owned Independent Businesses. You may know these as “mom & pops,” “local businesses,” “small businesses,” etc.
For the next several weeks, we’ll be answering the big question: Why specifically these businesses?
If you need a refresher, these are our five reasons:
- Economic Impact
- Entrepreneurship
- Uniqueness and Character
- Personalized Experience
- Community
Today, we dive into that first point: the economic impact that locally-owned independent businesses have on their community.
Economic Impact of LOIBs
It feels like a simple enough idea, right? You support your mom & pop coffee shop in your town because it’s been there forever and you’d be sad to lose it, and that’s reason enough! But, did you know that shopping from local, small businesses has a greater return to its community than any other type of business?
On average, for every $100 you spend at a local business, about $68 remains within the community.
Aggregates of different studies have shown that when you buy at locally-owned independent businesses, a greater amount is recycled back into the local economy. On average, for every $100 you spend at a local business, about $68 remains within the community.
Compare that to your local big-box store, where for every $100 you spend, only $14 remains in your community. Expand that to your online shopping, with a company like Amazon, where for every $100 you spend, only $2 stays in your community.

Why does this happen?
There are a few reasons why when you shop at your local mom and pop shop more cash remains within your community.
One is that these types of small businesses tend to hire people locally, who will in turn spend their salary within the community. This means that rather than the money going to the town over, or to a big boss out-of-state, the money recirculates locally.
[LOIBs] donate or contribute more on average to [...] their local schools, libraries, or fire-stations, etc.
Also, these local, independent business owners often hire services such as accounting, lawyers and contractors from their local community. This, again, ensures money stays within the community as it goes into other local businesses.
Another thing that happens, is that because local small businesses have a closer relationship with their community, they donate or contribute more on average to hyper-local charities or to fundraisers, such as their local schools, libraries, or fire-stations, etc.
Supporting locally-owned independent businesses means you’re building your local economy from within. It means you are creating a stronger, healthier, and more stable community from the inside.
So, take the pledge, move $20, and save local.
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