Three Reasons for Businesses to Think Locally

For most business owners, what matters most is the bottom line profit. This is not to say that a businessperson does not do what they do out of passion for their work or to serve others with a valuable product or service, only that if they fail to produce a profit at the end of the day, they will not be able to continue doing what they are doing. With this in mind, it is only natural to look for the lowest prices when making purchases related to the business. However, something else to keep in mind that helps ensure long-term viability is buying locally.

local business
Local Business

Most of us have heard the phrase “buy American”, and this is certainly a good motto to live by. However, with multi-national corporations integrating parts from overseas with services here at home, buying American is quite a bit more complicated than it sounds. Buying locally, however, is much easier. In addition, the benefits to the community will ultimately enhance the profitability of every business in the area.

Here are three specific ways that buying locally can help the community:

Reduced Unemployment: The more prosperous local businesses are, the more employees they will need. In addition, a strong local business is able to pay their workers better salaries, ensuring a higher caliber of employee and ultimately a better service provided. This benefits your business by keeping dollars in the hands of local consumers who will no doubt need your products or services as well.

Better Competition: When locally owned businesses are strong, they are able to stay competitive with the big box and chain stores. This in turn is good for everybody. Ask yourself this question; what would ultimately happen if there were only one major retailer where everyone had to go for groceries, clothing, electronics, auto parts, etc.? While this one particular retailer may have the lowest prices today, what do you think the lack of competition would do to their prices in the end?

The Law of Reciprocity: Most people acknowledge the universal law of reciprocity. In other words, “what comes around goes around.” This law applies especially to small businesses that support other local businesses. When you buy from other local business owners, you naturally develop relationships with them. Moreover, when they need something in your industry, these owners will come to you before looking at a company from out of town.

Bottom Line: In supporting local businesses, you may not always receive the absolute lowest price. If you are willing to pay a little more in the short-term, the long-term benefits will make the local economy (and your business) much stronger. There is good news in the short-term as well. Since most business expenses are tax deductible, you can take a higher tax write-off while you are patronizing your fellow community businesses. Just be sure to have an effective bookkeeping system in place so you can fully realize these benefits and speak with an accounting professional if you need help setting up such a system. The investment in a professional accountant will pay major dividends in the end.

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