About the Author

Christine Ferguson

Christine Ferguson

Christine Ferguson is the Vice President and Co-Owner of Ferguson Computers in Bullitt County, KY. She helps small business owners with website design, search engine optimization (SEO), and email hosting.

5 Positive Impacts of Local Businesses

Small chalkboard that reads "Support Local Business" sitting on top of office supplies

Local Businesses Are the Foundation of Our Communities

At some point in time, we have all been encouraged to “buy local”.

This sentiment is more than just a request for your business—it’s a rallying cry for your community.

Local businesses nurture and support their communities in a multitude of ways. Let’s take a look at 5 positive impacts that local businesses have on their communities.

1. Local Businesses Recycle Revenue Into the Community

The American Independent Business Alliance points out that local businesses pump revenue into the community in different ways.

  • Direct Revenue – Money that is spent by the business in order to operate (taxes, licenses, inventory, utilities, salaries, etc.)
  • Indirect Revenue – Money that was given to local governments and other local businesses, which is then used to support those entities
  • Induced Revenue – Money spent by consumers as they use their personal income in the local economy

The AIBA points out that money spent locally is recycled into the community at a rate of 48%.

In sharp contrast, money spent with national chains is recycled into the community at a rate of 13%.

This shows that when you spend your money at a local business, you are really supporting the community at large.

2. Local Businesses Create Jobs

Since the end of the Great Recession, small businesses have created 2 out of 3 private-sector jobs, according to the Bureau of Labor Statistics.

That makes small businesses a powerful backbone of the economy.

When small businesses employ people from within the community, they provide a greater opportunity for career growth and mobility.

Employees feel more connected to the business purpose and see the direct impact of their work within the community.

Hence, being employed by a small, local business can offer a sense of fulfillment and job satisfaction.

3. Local Businesses Generate Tax Revenue

Sales tax, licenses, and other levies on businesses account for 42% of local and state government tax revenue, as explained by the National Association of State Retirement Administrators.

State and local governments use this revenue to support:

  • Infrastructure
  • Housing & development
  • Education
  • Law enforcement and first responders
  • and many other programs that are necessary for the community to function

Although the debate over how tax money is spent will always endure, a fact that remains constant is that without business tax revenue our government would be unable to function.

Therefore local businesses are a necessity for the community.

4. Local Businesses Support Community Goals

In order for local businesses to thrive, their communities must thrive—and vice versa.

Local business owners are likely to step up and get involved with community initiatives because of this mutual dependency.

Local businesses often:

  • Sponsor local sports teams
  • Donate time and/or product to charitable causes
  • Offer internships to students from local schools
  • and more

Business owners are keenly aware of the needs of their community because they are directly invested in its strength and success.

Local businesses often work together to address deficiencies and execute community initiatives.

5. Local Businesses Bolster Local Culture & Identity

Just as local business success is closely tied to community success, the culture of a local business and the culture of a community often directly influence each other.

Everybody can think of a business that has been around in their community for ages.

It could be a funeral home, a general store, a pharmacy, a greenhouse…whatever the business, once it has stood the test of time it becomes a part of the fabric of the community.

The business might own a distinctive piece of property that has become a community landmark.

The family who owns the business has probably sent their children through community schools, volunteered for local organizations, and settled down in a local neighborhood.

Local business owners are actively involved in their community, so they understand its needs and wants.

This knowledge influences their business decisions, so they uniquely provide for the citizens of their community.

When You Support a Local Business, You Support the Community

As you can see, local businesses play an integral role in their community.

When you support your local business, you are supporting your community as a whole.

You can take pride in knowing that you participate in a self-sustaining and vibrant ecosystem.

As a local business in Bullitt County, Kentucky—we thank you!

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