We're investing in our communities - and here are five reasons you should, too

MNP may seem like an unlikely advocate for local businesses. Yet, if you asked our team members, most would say their MNP office is a key part of the local small business community. And every single one would agree small and mid-sized businesses are the overwhelming reason for our firm’s continued success.

That’s because we’ve built our business to serve the needs of every city and town where our people live and work— everything we do begins at the local level, with a relationship. That’s how it’s been for the last 60-plus years: We got our start in a community where small owner-run businesses were the region’s main employer and economic driver. And those are overwhelmingly the types of businesses (and communities) we still serve today.

While everyone is feeling the shockwaves of the COVID-19 pandemic, nobody is reeling more than those local business owners. Many have taken a significant financial hit as the lockdowns forced them to close and consumers to shift their buying habits. We’ve done our best to help them balance their books, adopt new technologies, access government supports, and put business resilience plans in place. But at the end of the day, what they really need is you.

As we enter a new phase in Canada’s economic recovery, perhaps the fastest and most enduring way we can accelerate that process is to invest in our own back yards. If you’re not convinced, just consider these five ways supporting local businesses can benefit your entire community.

More money stays in your community

Local businesses don’t ladder up their revenue to a head office across the country or a global cohort of shareholders. Rather, these funds largely provide income to a local entrepreneur who pays local property taxes, patronizes local businesses and institutions, and does business with other local vendors and service providers.

Estimates vary from city to city, but a 2008 Civic Economics study revealed local businesses kept as much as 25 cents more in the community for every dollar spent than their non-local counterparts. Imagine 10 small businesses in your neighbourhood each generate $1 million in annual revenue. Of that $10 million, roughly $6.8 million would stay in your community compared to $4.3 million for non-local businesses.

Local business owners support local initiatives

Consider all the small grassroots initiatives in your neighbourhood like community associations, community cleanups, youth sports teams and leagues, and school fundraisers. These programs are difficult to sustain on individual donations alone, but often too small to attract corporate sponsorships and don’t meet government funding criteria. Fortunately, they’re usually right in line with local business owners’ priorities.

Small business owners often live in or near the community their business is in. They often have children of their own taking part in these programs, and a personal stake in seeing the surrounding area reach its full potential.

They know these local initiatives can provide a more immediate and visible return on their investment — whether it’s in the form of better brand awareness, improving outcomes for community members, and / or enhancing the community’s reputation among visitors or prospective residents.

Keeps your neighbourhood culturally and economically vibrant

Commercial centres are on par with housing and green spaces as a critical part of any vibrant community. They’re a big part of the reason people choose to live in or visit certain areas. And while large national or international retailers and restaurants will occupy many of these units — local businesses are undoubtedly the mortar that hold those bricks together.

Consider your own or a particularly iconic neighbourhood in your city. How much does its appeal owe to one or a handful of boutique shops, salons, restaurants, bars, or grocers which you can only find in that tiny corner of your city? More importantly how much would the culture change if the neighbourhood lost a chain-style business, versus a particularly iconic local business?

People can go anywhere to patronize a national/international chain, and they are guaranteed to have the same experience no matter which location they go to. On the other hand, local businesses can inspire people to go far out of their way to visit a community. And that can be worth far more than the revenue they generate for themselves.

Local businesses support local businesses

While it’s impossible for anyone to patronize local businesses exclusively, local business owners are far more likely to use the services of other local suppliers and service providers than their national and international counterparts. Because they aren’t beholden to corporate-mandated contracts to work with an approved list of vendors, they’re freer to select the right partner for the job. Often this means working with someone who understands their needs and where they’re coming from.

But there’s also solidarity among the relatively small and tight-knit local business community. Local business owners understand the challenges of surviving in a highly competitive environment. They know their support will go a long way to helping a fellow entrepreneur make a living and invest in their community. And they trust in word of mouth and reciprocal benefits among their community — creating a rich ecosystem of support.

They can’t survive without you

Broadly speaking this applies to any business — but the undeniable fact is local businesses depend on you, the individual consumer, far more than their national and international counterparts. Local businesses generally have lower revenue and higher overhead on a per customer basis, which means every lost sale hits their bottom line exponentially harder.

A big box retailer has options if it takes a 20 percent hit to its year over year revenue. It could issue new shares, freeze wages, conduct layoffs, liquidate inventory, or even close underperforming locations. A local business owner has far fewer courses of action. In most cases they can either significantly discount their own income, take out a loan, or close the business.

Challenging times like the COVID-19 pandemic are troubling for the entire business community. But small business owners are feeling the impacts much harder and far more immediately. Those who were not deemed essential services faced months of lost or reduced revenue between March and June. Price conscious consumers also shifted their purchasing habits to larger retailers and service providers.

Even as the economy re-opens, a return to normal won’t be enough to save many local businesses. It requires a concerted effort from everyone in the community to shift their spending habits to help local entrepreneurs recover. As you’ve seen, it’s not just about helping a member of your community — its about investing in the present and the future of your whole community.

Small actions can have huge impacts. Take a moment to review your purchasing habits, both in business and at home — identify areas where supporting local could create symbiotic benefits for yourself, your community, and a local business owner. And be sure to share these benefits with others in your network so they can do so as well.