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Buy Local: Why Small Business Owners Must Practice What They Preach

Business.com / Last Modified: June 4, 2018
Image credit: SK Design/Shutterstock

You've asked your customers to buy local, and you should buy local too. Business-to-business (B2B) purchases can have a ripple effect on the small business community. Here are four factors to keep in mind when choosing how to spend your business dollars.

Small businesses often advocate for consumers to buy local, and the message seems to have caught on. In 2016, SCORE, a nonprofit resource partner with the U.S. Small Business Administration, reported that 90 percent of Americans shop at small businesses at least once a week thanks to their convenience, unique inventory and stellar customer service. These consumers' purchases go a long way toward growing communities and creating jobs, but when it comes to the needs of the business, how are those dollars being spent? When small businesses practice what they preach by making business-to-business (B2B) purchases locally, that spending can have a ripple effect on the local small business community. 

1. Make a local economic impact.

Studies show that small retailers selling to consumers or other businesses results in community reinvestment, job creation and giving back. Last year, Independent We Stand, the North American Retail Hardware Association and Civic Economics found that B2B purchases made at small and local businesses kept more than twice as much money in the local economy as B2B purchases made at national chains. The Home Sweet Home: Pros' Edition study also revealed that if just one type of commercial purchaser – contractors – shifted 10 percent of their business purchases from national chains to independent suppliers, local economies across the country would see an additional $1.5 billion in economic activity. Imagine the boost that could occur if small business owners across all categories made their commercial purchases – from paper supplies to booking travel and even scheduling IT services – locally.

2. Stand out from the crowd.

Beyond the economic benefit, small business owners must stand out from the crowd to better serve their customers. Statistics show consumers are willing to support them if they do. Sixty-three percent of consumers who buy locally do so because they want to support local businesses, according to the SCORE study. Fifty-four percent of consumers appreciate the one-of-a-kind products that small businesses stock. In other words, consumers want small businesses to do things differently from the big-box stores. They not only recognize the difference between small businesses and national chains but also appreciate the qualities that make small businesses unique.

If small business owners use national-chain suppliers for all their commercial needs, they risk losing some of those qualities that make their businesses stand out. Instead, small businesses should keep their inventories unique and their business practices special by doing things the local way. Little things like free gift-wrapping for significant holidays, complimentary bottled water on hot days or hot cocoa when it's cold, and customer-driven charitable donations can make all the difference.

3. Set a good example. 

Of course, practicing what you preach is all about setting the right example. Imagine what customers might think if they chose to visit your business rather than ordering what they need online, and then while in your store, they see an Amazon shipment arriving. That doesn't encourage them to continue buying local.

Customers value small businesses for their connection to the local community. Set a good example for customers by recommending and promoting the other local businesses you have worked with or enjoy frequenting. That way, customers know your business is doing its part to support the community.

4. Find strength in numbers.

Finally, small business owners should shift their business expenses locally because small businesses are stronger when they work together. You can connect with local businesses and leaders through Main Street organizations and "buy local" campaigns. Over the last three decades, these groups have generated a net gain of more than 614,000 jobs and more than $74 billion in reinvestment, according to the National Main Street Center. When small businesses make B2B purchases locally, they work together for the good of their businesses and the community.

Clearly, buying local isn't just for consumers. Commercial purchases go further when they're made locally, helping to create more jobs, reinvest more dollars into the local economy and show more Americans what small businesses are all about. To see what your business's purchasing dollars could do for the community, check out Independent We Stand's economic impact calculator. While you're there, you can also use the Locals Only Business Search to find a new small business to support.

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