Many business owners dream of heading a multi-national corporation that does business all over the world ― but not every business owner hopes for such a global reach. In fact, most small-business owners are perfectly happy with reliable, albeit modest profits from one or two locations in their hometowns.
Yet, with the vast majority of business content repeating the mantra “Expand or Die!” it can seem like a risky business decision to stay small in this economy. However, those articles are forgetting the advantages of staying local. It is possible to survive and thrive as a small, local business; here’s how.
One of the Advantages of Staying Local: Retaining Better Connection With Core Customers
There is little more satisfying than seeing customers return time and time again due not only to your wonderful products but because they appreciate having a relationship with the business itself. By staying small and local, business owners get to experience the thrill of meeting and interacting with their loyal customers. This strong foundation with customers allows local businesses to better understand community needs and wants, thereby increasing both revenues and customer contentment.
Meanwhile, larger businesses rarely have time or resources to develop such meaningful connections because too much effort is focused on continuing to expand to new locations. These businesses must find other ways to engage their audience ― usually impersonally ― to fill the gap left by core customer feedback.
Recognize Positive Changes to Community
Local economies depend on local businesses. Dozens of economic studies on the subject have found the following overwhelming statistics:
- Nonlocal businesses remove roughly two-thirds of its revenues from the community. (David Morris, “The New City States”)
- Local businesses contribute double or triple the economic impact of nonlocal businesses. (Justin Sachs “The Money Trail”)
- Local businesses create stable jobs that aren’t likely to move to lower-wage areas. (Edward Lowe Foundation’s Your Economy)
By staying local, businesses have the opportunity to make substantial contributions to their communities ― and not just through economic activity. Local businesses are usually more active with local charities, tackling problems that are important to the community with the help of their customers. Then, business owners can literally see the positive changes they have made.
Larger companies may argue that their larger coffers grant them more power to institute change, but as Slate explains, dismally few big businesses are willing to donate a similar percentage of profits as small businesses do. The more involved a business is with a particular community, the more drive it has to make real change.
Cultivate Partnerships With Other Local Businesses
Large companies often argue that their enormous size grants them the ability to offer products and prices that smaller businesses can’t, but in doing so they neglect to mention that they do so at the expense of quality and service. Small, local businesses provide a personalized touch more often in-line with other small, local business values, so partnerships can be extremely profitable. Plus, there are particular services where a similar local style is paramount; for example, a small business in Florida would see the best results from marketing firms in Florida, which understand local trends and tastes.
All companies can easily survive by procuring supplies and services from faceless, big-box wholesalers ― but that way isn’t necessarily the best way to do business.
Expand in Alternative Ways
Just because a local business isn’t expanding with additional locations in different cities doesn’t mean it cannot expand at all. In fact, most small businesses are continuously growing in ways that maintain their local identities while improving customer experience.
Alliances with similar local businesses, like the partnerships described above, can be especially beneficial to businesses and customers alike. For example, a bar that caters to hikers and mountain bikers might ally with a nearby rock gym, providing drink discounts to patrons who went climbing that day. Alliances allow two local businesses to grow in terms of audience expansion and satisfaction.
Diversification is another strategy of for small-business growth. A bookstore can add a small coffee shop and bakery; a video game store can add board games and comic books to its selection; and a furniture store can start selling mattresses. There are many ways to diversify effectively without losing the advantages of staying local.
Sometimes, that dream of running a global business empire should stay a dream. It is impossible to disregard that advantages of staying local provides many benefits ― to customer, to community, and to business.