Jurich: Choosing Local Makes (A Lot of) CentsWritten by Stacy Jurich | | firstname.lastname@example.org
Locally owned independent businesses — yes the small guys — have a greater impact on the local economy and community than they are given credit for. These businesses, the kind of grocers that let me take an IOU when I forget my card, or the kind of restaurant where my grandma left her boys as collateral until she came back with her pocketbook to pay for dinner, are often forgotten about when conventional economic development is sought after. Establishing a strong and stable local economy is more sustainable and reliable for to our economy, community and environment. Think Toledo, not China.
The University of Toledo Urban Affairs Center did a study in 2004 that compared the economic impact of Thackeray’s Bookstore to Barnes & Noble. Thackeray’s annual economic impact was $5 million in Lucas County, compared to only $1 million from Barnes & Noble.
This is because of the multiplier effect; Thackeray’s revenues stayed within the local economy through their use of local labor, local suppliers, and profit. In the case with the national chain, revenues stayed within the community through employee wages. This study also found that $100 spent at Thackeray’s led to a local economic return of $44 through the multiplier effect, compared to an economic return of only $20 from Barnes & Noble. Consider this multiplier and these figures and remember how many independent businesses used to be in the Westgate shopping center that is now occupied by a few national chains … how many millions of dollars (and cool businesses) are we losing out on?
Since independent business owners live in this community and have a vested interest in the success of Toledo, the profits they receive are likely going to be spent again at a fellow independent business. For example, if I spend $10 on lunch at Pam’s Corner, part of that will cover the cost of the food which was purchased locally at the farmer’s market, Country Grain’s Market and other local food suppliers. Pam sources nearly all of her services locally and does a great deal of her personal spending at other locally owned businesses.
If I spent $10 at Applebee’s, Subway or another mediocre bore box, all of my money would leave Toledo to out-of-state suppliers and corporate headquarters, except for a small percentage going toward taxes and employee wages.
A 2003 study by the Institute of Local Self Reliance shows that locally owned businesses spent 44.6 percent of their revenue within the surrounding two counties and another 8.7 percent elsewhere in the state, compared to big-box retailers spending an estimated 14.1 percent locally, the rest leaving the state.
Locally owned businesses make Toledo different from other cities across America. On a recent drive 500 miles down I-75, my friends and I were nauseated by each town exit we passed that was lined with the same exact businesses, making one hard to differentiate from another. It was all the chain restaurants, hotels, gas stations, shopping centers … I’m sure you can picture it. Ew.
Toledo is special in that the majority of businesses Downtown are locally-owned and non-franchise, and LET’S KEEP IT THAT WAY. Toledo also has cute neighborhood clusters of businesses throughout town, like Cricket West area with Calvinos, Galaxy Video, Churchill’s, Wersell’s, Optical Arts, Red Sky, Rama Lama, Loonar Station. There are many independent businesses in the South End, Lagrange Street, UpTown, Warehouse District, Five Corners, Point Place and more. These businesses give Toledo something that is hard to put an economic value on: a sense of community and character based on our unique culture that can only be found here.
One way to establish a healthy and stable economy is to assess the local demands and find out what goods and services are being imported into Toledo. This would allow Toledoans opportunities to create enterprises that meet our local demands at institutional and citizen levels. By redirecting money that is flowing out of the local economy, we can “plug the leaks” and re-generate the economy from within by taking advantage of the resources we already possess.
Instead of investing thousands of dollars to attract international investors and distant and unfamiliar business people to bring “economic growth” to Toledo, we should invest in an assessment of local spending and purchasing and in our own people with capital for start ups and equipment.
If each household in Lucas County re-directed $100 of spending to a locally owned store, this could add up to $8 million in revenue to the local economy. Instead of waiting for leaders to jump start our economy and create jobs, we can build on what we already have, and sensibly keep as much of our hard-earned money circulating in Toledo’s economy. If you spend money at a locally owned business, it is more likely to end up back in your wallet.
For more information visit www.toledochooselocal.com.
Email Stacy Jurich at email@example.com