Why Local First?
We chose "Local First" as our name because it sums up our goal: we want people to think local first when they have something to buy – whether it be food, goods or services. If a local business is not available or does not meet your needs, then of course you should seek out a chain store or internet company that can satisfy you. We are not preaching “local only.” If we can divert a large chunk of the money we send out of state to locally owned businesses, the benefits would be considerable – financially and otherwise.
The economic, social and aesthetic vitality of our communities is greatly enhanced by a strong independent business sector. Because local business people eat, sleep, play, shop, pay taxes, and send their kids to school in the towns they live in, they have a powerful vested interest in keeping their towns vibrant. The common benefits of a strong independent business sector are a healthier economy, a more engaged citizenry and more choice for consumers. Locally owned businesses are the roots that feed the tree of a prosperous and healthy community – Feed the Roots!
Money Spent Local, Stays Local
The money spent at local businesses has far-reaching effects. Several studies have shown that money spent at a locally owned business stays in the local economy and continues to strengthen the economic base of the community. A 2002 case study in Austin, Texas showed that for every $100 in consumer spending at a national bookstore in Austin, Texas the local economic impact was only $13. The same amount spent at locally based bookstores yielded $45, having more than three times the economic impact. Click here for the full study.
A 2003 case study of Midcoast Maine covering several lines of goods and services validated these findings. In Maine eight locally owned businesses were surveyed. The survey found that the businesses spent 44.6 percent of their revenue within the surrounding two counties. Another 8.7 percent was spent elsewhere in the state of Maine. The four largest components of this local spending were: wages and benefits paid to local employees; goods and services purchased from other local businesses; profits that accrued to local owners and taxes paid to local and state government. All eight businesses banked locally, used local accountants, advertised in local businesses publications, purchased inventory from local manufacturers, and used local Internet service providers and repair people. The study estimated that a big box retailer returns just 14.1 percent of its revenue to the local economy, mostly in the form of payroll. The rest leaves the state, flowing to out-of-state suppliers and back to corporate headquarters. Click here for the full study.
Of course, shopping online returns nothing to the community, unless you are shopping with a local business. The impact of shopping locally over shopping online is large - many orders of magnitude. As mentioned above, this is because of how the money circulates - otherwise known as the multiplier effect. Click here for a nice video on how this works.
Businesses Support The Community
Local owners, typically having invested much of their life savings in their business, have an obvious and natural interest in the long-term health of their community. These businesses are essential to charitable endeavors, with employees frequently serving on local boards and supporting a variety of causes within the community including school funding, town governance, social services, and contributions to local non-profit organizations. Vermont is blessed with many non-profit organizations and they receive their greatest support from locally-owned businesses.
Research has shown that small local businesses make indispensable contributions to communities and neighborhoods. A study of businesses in Oregon, detailing charitable giving showed that when in-kind contributions were included, small firms gave an average of $789 per employee, medium sized firms $172, and large firms $334. (NFIB Small Business Policy Guide - Chpter 3, page 35) Additionally, large firms contribute primarily to the area where the corporation is headquartered, not necessarily where they do business.
Long-Term Strength of Economy
Chain businesses, by their very nature, are controlled from central headquarters – which could be anywhere in the world. They are making decisions based on factors which might not have anything to do with what is right for one particular location, business or community. If the exchange rate changes and they have to cut costs, then the Vermont store might have to close down at a moments notice. Hundreds of chain stores pick up and leave every year - leaving vacant buildings, eroded economies and less choice for local consumers. What is especially troublesome is when the chain store has put a local store out of business and then leaves. Jobs are lost and the consumer is stuck having to drive a long way.
Local Businesses Offer Stable Employment
Small businesses account for the largest share of net new jobs generated each year, and locally based business provide some of the most stable employment opportunities in a community. For all their economic power, the number of jobs provided by global corporations relative to the world's workforce is small. The 200 largest corporations in the world employ less than 1 percent of the global workforce although they account for about 30 percent of global economic activity. Between 1983 and 1999 the number of people they employ grew by 14 percent while their profits grew over 360 percent. Most job growth comes from local independent businesses. (Korten)
Diversity Of Choice
There are so many interesting people in Vermont and some of them express themselves in the businesses they run – and we benefit. As local businesses go out of business, consumers have fewer and fewer choices when shopping for goods and services, dining and sleeping. There are many communities across America where this has happened already, where they have little choice and are at the whim of far away corporate decision making. Do you want to be limited to staying in chain hotels, eating at chain restaurants and shopping at big boxes? All of these businesses have their place, but we should not limit ourselves to them. Every time you make a purchase, you're exercising the power of choice. As one slogan reads, “You are not a clone, why shop at one?”
Small manufacturers look to local retailers to introduce and give their new products a chance. Local retailers are free to accept and take a chance with the goods of these manufacturers. This results in the creation of more jobs for local producers. Even though a single local shop might have a limited selection of goods, in a healthy community, a multiplicity of local, independent retailers creates great diversity and selection.
The Unique Character Of Vermont
What type of future do we want for our state? Local, independent businesses are the heart of Vermont towns. They contribute to its unique character; they provide diversity, options, personalized attention, and bring life to our many historic buildings. Among other things, we can get a haircut, buy a book, choose paint, make copies, get fresh produce, buy a good bottle of wine and fresh seafood to grill, find a great vintage dress, have a fresh croissant, rent skis or a snowboard, select a diamond ring, sell or buy a house, get a fishing license, cater a luncheon, have a meal, or fill a prescription. Each time we spend a dollar, we would do well to weigh the full value of our choice, not only for our own benefit, but also for what it means to the health and vitality of our community in the years to come.
Additionally, an economy of diverse, unique businesses attracts today's skilled workers and investors who can choose to settle and grow businesses anywhere. In his research, Richard Florida, author of The Rise of the Creative Class, shows that today's creative workers are choosing to settle in places that preserve their distinctive character. And, Richard Moe, president of the national historic preservation trust says these one-of-a-kind communities attract tourists as well. What tourists want is the sense of being Someplace, not Just Anyplace. They aren't interested in visiting communities that have transformed themselves into a sad hodge-podge of cookie-cutter housing tracts, cluttered commercial strips and bleak downtowns.
Lower Environmental Impact
In addition to building a strong economic base, supporting the local community and creating new jobs, small businesses, which are more often located in central business districts, have less impact on local ecosystems compared to larger retailers located in strip malls or stand-alone buildings. To accommodate large retail development, roads and parking lots must be built which results in a greater reliance on cars and an increase in auto emissions. As big box stores and chain retailers consume more and more undeveloped land, polluted runoff from their parking lots is placing an ever-greater burden on the nation's rivers, lakes, and coastal waters. One way to preserve a community's land and natural resources is to channel retail activity back into downtowns and neighborhood shops. Multistory buildings reduce the footprint of buildings. Higher densities and greater access for pedestrians and public transit mean significantly less land devoted to roads and parking lots. (New Rules Project, Home Town Advantage Bulletin, September 2003)
Tax Revenue Goes Further
Local businesses in town centers require comparatively little infrastructure investment and make more efficient use of public services. The taxes paid by large retailers often do not cover the increase in public services that are required and the difference can be dramatic, according to a recent study in Barnstable, Massachusetts, a city of 48,000 people. The study, conducted by Tischler & Associates, compared public revenue and costs for various land uses. It found that the city's small, downtown stores generate a net annual surplus (tax revenue minus costs) of $326 per 1,000 square feet. Big-box stores, strip shopping centers, and fast-food outlets, however, require more in services than they produce in revenue. A big-box store creates an annual tax deficit of $468 per 1,000 square feet.
There Is A Role For Chain Stores
We do want to acknowledge that there is a place for chains, “big box” stores and internet companies. Not everything can or will be offered by independent businesses. Most importantly, we are adamant that there needs to be room for everyone in our economy, but in order for that to be true, the playing field must be level. Too many of our local businesses are squeezed out of the market while chains enjoy tax breaks and subsidies that help keep them on top (for instance, amazon.com enjoys a sales tax moratorium even though it is over 10 years old and has billions in sales). The pendulum has swung in the direction of national corporations. It is time to swing it back to a more balanced position, one that benefits all businesses, including locally-owned independents.
Chain stores are not inherently bad. Indeed, they deliver a consistent level of goods and services we appreciate. What would be bad is if we woke up to find nothing but chain stores, that Vermont had been reduced to “Anywhere, USA”. Each year brings more national chains displacing locally owned businesses. Local First VT aims to reverse the trend of losing locally owned independent businesses by organizing collaborative efforts among members and creating a stronger bond between local businesses and the community.
Money Spent Local, Stays Local
The money spent at local businesses has far-reaching effects. Several studies have shown that money spent at a locally owned business stays in the local economy and continues to strengthen the economic base of the community. A 2002 case study in Austin, Texas showed that for every $100 in consumer spending at a national bookstore in Austin, Texas the local economic impact was only $13. The same amount spent at locally based bookstores yielded $45, having more than three times the economic impact. Click here for the full study.
A 2003 case study of Midcoast Maine covering several lines of goods and services validated these findings. In Maine eight locally owned businesses were surveyed. The survey found that the businesses spent 44.6 percent of their revenue within the surrounding two counties. Another 8.7 percent was spent elsewhere in the state of Maine. The four largest components of this local spending were: wages and benefits paid to local employees; goods and services purchased from other local businesses; profits that accrued to local owners and taxes paid to local and state government. All eight businesses banked locally, used local accountants, advertised in local businesses publications, purchased inventory from local manufacturers, and used local Internet service providers and repair people. The study estimated that a big box retailer returns just 14.1 percent of its revenue to the local economy, mostly in the form of payroll. The rest leaves the state, flowing to out-of-state suppliers and back to corporate headquarters. Click here for the full study.
Of course, shopping online returns nothing to the community, unless you are shopping with a local business. The impact of shopping locally over shopping online is large - many orders of magnitude. As mentioned above, this is because of how the money circulates - otherwise known as the multiplier effect. Click here for a nice video on how this works.
Businesses Support The Community
Local owners, typically having invested much of their life savings in their business, have an obvious and natural interest in the long-term health of their community. These businesses are essential to charitable endeavors, with employees frequently serving on local boards and supporting a variety of causes within the community including school funding, town governance, social services, and contributions to local non-profit organizations. Vermont is blessed with many non-profit organizations and they receive their greatest support from locally-owned businesses.
Research has shown that small local businesses make indispensable contributions to communities and neighborhoods. A study of businesses in Oregon, detailing charitable giving showed that when in-kind contributions were included, small firms gave an average of $789 per employee, medium sized firms $172, and large firms $334. (NFIB Small Business Policy Guide - Chpter 3, page 35) Additionally, large firms contribute primarily to the area where the corporation is headquartered, not necessarily where they do business.
Long-Term Strength of Economy
Chain businesses, by their very nature, are controlled from central headquarters – which could be anywhere in the world. They are making decisions based on factors which might not have anything to do with what is right for one particular location, business or community. If the exchange rate changes and they have to cut costs, then the Vermont store might have to close down at a moments notice. Hundreds of chain stores pick up and leave every year - leaving vacant buildings, eroded economies and less choice for local consumers. What is especially troublesome is when the chain store has put a local store out of business and then leaves. Jobs are lost and the consumer is stuck having to drive a long way.
Local Businesses Offer Stable Employment
Small businesses account for the largest share of net new jobs generated each year, and locally based business provide some of the most stable employment opportunities in a community. For all their economic power, the number of jobs provided by global corporations relative to the world's workforce is small. The 200 largest corporations in the world employ less than 1 percent of the global workforce although they account for about 30 percent of global economic activity. Between 1983 and 1999 the number of people they employ grew by 14 percent while their profits grew over 360 percent. Most job growth comes from local independent businesses. (Korten)
Diversity Of Choice
There are so many interesting people in Vermont and some of them express themselves in the businesses they run – and we benefit. As local businesses go out of business, consumers have fewer and fewer choices when shopping for goods and services, dining and sleeping. There are many communities across America where this has happened already, where they have little choice and are at the whim of far away corporate decision making. Do you want to be limited to staying in chain hotels, eating at chain restaurants and shopping at big boxes? All of these businesses have their place, but we should not limit ourselves to them. Every time you make a purchase, you're exercising the power of choice. As one slogan reads, “You are not a clone, why shop at one?”
Small manufacturers look to local retailers to introduce and give their new products a chance. Local retailers are free to accept and take a chance with the goods of these manufacturers. This results in the creation of more jobs for local producers. Even though a single local shop might have a limited selection of goods, in a healthy community, a multiplicity of local, independent retailers creates great diversity and selection.
The Unique Character Of Vermont
What type of future do we want for our state? Local, independent businesses are the heart of Vermont towns. They contribute to its unique character; they provide diversity, options, personalized attention, and bring life to our many historic buildings. Among other things, we can get a haircut, buy a book, choose paint, make copies, get fresh produce, buy a good bottle of wine and fresh seafood to grill, find a great vintage dress, have a fresh croissant, rent skis or a snowboard, select a diamond ring, sell or buy a house, get a fishing license, cater a luncheon, have a meal, or fill a prescription. Each time we spend a dollar, we would do well to weigh the full value of our choice, not only for our own benefit, but also for what it means to the health and vitality of our community in the years to come.
Additionally, an economy of diverse, unique businesses attracts today's skilled workers and investors who can choose to settle and grow businesses anywhere. In his research, Richard Florida, author of The Rise of the Creative Class, shows that today's creative workers are choosing to settle in places that preserve their distinctive character. And, Richard Moe, president of the national historic preservation trust says these one-of-a-kind communities attract tourists as well. What tourists want is the sense of being Someplace, not Just Anyplace. They aren't interested in visiting communities that have transformed themselves into a sad hodge-podge of cookie-cutter housing tracts, cluttered commercial strips and bleak downtowns.
Lower Environmental Impact
In addition to building a strong economic base, supporting the local community and creating new jobs, small businesses, which are more often located in central business districts, have less impact on local ecosystems compared to larger retailers located in strip malls or stand-alone buildings. To accommodate large retail development, roads and parking lots must be built which results in a greater reliance on cars and an increase in auto emissions. As big box stores and chain retailers consume more and more undeveloped land, polluted runoff from their parking lots is placing an ever-greater burden on the nation's rivers, lakes, and coastal waters. One way to preserve a community's land and natural resources is to channel retail activity back into downtowns and neighborhood shops. Multistory buildings reduce the footprint of buildings. Higher densities and greater access for pedestrians and public transit mean significantly less land devoted to roads and parking lots. (New Rules Project, Home Town Advantage Bulletin, September 2003)
Tax Revenue Goes Further
Local businesses in town centers require comparatively little infrastructure investment and make more efficient use of public services. The taxes paid by large retailers often do not cover the increase in public services that are required and the difference can be dramatic, according to a recent study in Barnstable, Massachusetts, a city of 48,000 people. The study, conducted by Tischler & Associates, compared public revenue and costs for various land uses. It found that the city's small, downtown stores generate a net annual surplus (tax revenue minus costs) of $326 per 1,000 square feet. Big-box stores, strip shopping centers, and fast-food outlets, however, require more in services than they produce in revenue. A big-box store creates an annual tax deficit of $468 per 1,000 square feet.
There Is A Role For Chain Stores
We do want to acknowledge that there is a place for chains, “big box” stores and internet companies. Not everything can or will be offered by independent businesses. Most importantly, we are adamant that there needs to be room for everyone in our economy, but in order for that to be true, the playing field must be level. Too many of our local businesses are squeezed out of the market while chains enjoy tax breaks and subsidies that help keep them on top (for instance, amazon.com enjoys a sales tax moratorium even though it is over 10 years old and has billions in sales). The pendulum has swung in the direction of national corporations. It is time to swing it back to a more balanced position, one that benefits all businesses, including locally-owned independents.
Chain stores are not inherently bad. Indeed, they deliver a consistent level of goods and services we appreciate. What would be bad is if we woke up to find nothing but chain stores, that Vermont had been reduced to “Anywhere, USA”. Each year brings more national chains displacing locally owned businesses. Local First VT aims to reverse the trend of losing locally owned independent businesses by organizing collaborative efforts among members and creating a stronger bond between local businesses and the community.
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Last modified 2006-08-29 07:38 PM
Last modified 2006-08-29 07:38 PM
