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

Jennifer Post
Jennifer Post
business.com Contributing Writer
Updated Feb 04, 2022

Supporting local small businesses can generate sales and create loyal customers for your company.

Small businesses often advocate for consumers to buy local, and the message seems to have caught on. Research from the nonprofit organization SCORE found that 91% of Americans patronize a small business at least once a week, and almost half of Americans do so two to four times weekly. These consumers’ purchases go a long way toward growing communities and creating jobs, and local businesses should contribute as well. When small businesses practice what they preach by making business-to-business (B2B) purchases in their own community, that spending can have a ripple effect on the area. 

How businesses can support local businesses

Partner up for mutually beneficial interactions.

Small business owners can support one another through mutually beneficial interactions that lead to referrals for one another, according to Shilonda Downing, founder of Virtual Work Team.

“When I speak with my current clients and potential clients, I’m always thinking of ways my team and I can benefit them,” Downing said. “If I feel that one of my clients can assist another, I always make the connection. It’s a part we can all play as small business owners to help one another.”

Tyler Rice, co-owner and technical director of Animas Marketing, added that trading goods and services as well as sharing knowledge through public meetups and workshops is another form of a mutually beneficial relationship among small businesses.

Did you know?Did you know? There is such a thing as a B2B sharing economy, where small businesses rent out equipment or other goods and services to others that need it in the moment but might not require it for the long term.

Utilize another small business as your supplier.

Craig Ross, president of Infantile Industries LLC, said that some small businesses will use large ones for supplies until they meet someone local that can really support them.

“Price is always a key component, but in today’s world, what’s old is new again,” he added. “Relationships matter. In a digital world, we long to get close to those we work with. That is where small business shines. We know our clients. We know their clients. Their success is our success.” 

Going with another small business over a large business for supplies might have unexpected benefits as well.

“If there’s a particular service needed for your business, you can skip the big-box stores and work with other local business owners and make beneficial connections that you might not have originally thought about,” Rice said.

There might be some financial implications when switching from a larger-scale operation to a small business for supplies, but you have a better chance of reducing expenses by working with a small business than a larger one whose priority might just be money. 

Include other small businesses in your marketing efforts.

Promoting other small businesses by engaging with their social media content and reposting interesting stuff they’re doing is a great way to support other small businesses.

Vasiliki Gkarmini, co-owner of Next Door Goddess LLC, said that including other small businesses in gift guides or newsletters is a perfect example of promoting another small business.

“For example, we will show our jewelry alongside other products of small businesses or sold by small business owners and include links to their websites,” Gkarmini explained. 

This could not only increase your own sales, but also improve those of other small businesses in your area. 

Refer customers to other businesses.

“One of my favorite ways of supporting other small businesses is through referrals,” said John Ross, CEO of Test Prep Insight. “Anytime we get a customer that asks us for a product or service that we don’t provide, I don’t just suggest they Google it. That almost inevitably ends up with them finding some mega-company to fill their need.”

Instead, Ross recommends other small businesses he knows will do a quality job. This small act goes a long way, as a referral usually carries heavy weight and will help another small business nab a sale.

This also makes your business look generous, as customers may view it as good customer service because you’re helping your customers even if it doesn’t result in a sale. This could increase your sales in the long run.

Bottom LineBottom line: 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.

How supporting local businesses impacts larger businesses

1. You invest in your community rather than a big corporation.

Studies show that small retailers selling to consumers or other businesses results in community reinvestment, job creation and giving back. Imagine the boost that could occur if small business owners across all categories made their commercial purchases – from paper supplies to booking travel to scheduling IT services – locally.

According to SCORE, for every $1 spent at a local small business, 67 cents stays in the local community, with 23 cents of that getting reinvested into other local businesses and the rest going to wages and benefits. An Intuit study found that 57% of Americans say their main reason for shopping small is to keep money local.

Large businesses could start to see the negative impacts of this on their own business. “This movement could push large-scale businesses to collaborate with, invest in, or mentor the smaller ones and help them increase their market share, which would increase the appeal of large businesses and help small businesses as well,” Gkarmini said.

2. Small businesses stand out from the crowd by featuring small batch pieces.

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. In other words, consumers want small businesses to do things differently from the big-box stores. They not only recognize the disparity 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 the qualities that make their businesses distinctive. 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. You help make supporting local businesses, not big-box stores, the standard. 

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 locally.

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.

TipTip: Buying locally isn’t just for consumers. To see what your business’s purchasing dollars could do for the community, check out Independent We Stand’s economic impact calculator.

4. The more small businesses, the better.

Finally, owners should shift their business expenses locally because small businesses are stronger when they work together. You can connect with nearby businesses and leaders through Main Street organizations and “buy local” campaigns. 

Bill Brunelle contributed to the writing and research in this article.

Image Credit:

Halfpoint / Getty Images

Jennifer Post
Jennifer Post
business.com Contributing Writer
Jennifer Post is a professional writer with published works focusing on small business topics including marketing, financing, and how-to guides. She has also published articles on business formation, business software, public relations and human resources. Her work has also appeared in Fundera and The Motley Fool.