September 12, 2018 10:46am
The Big Benefits of Buying Local
The surest way to create more and better jobs in Greater Louisville is for those of us who live and work here to buy locally whenever possible. To be clear, Louisville (like every region) is at its best when its local businesses are thriving and providing good jobs. The impact of local people patronizing locally-owned businesses simply can’t be overstated.
Studies indicate that independent and locally owned retailers and restaurants return about 55 percent of all their revenue to the local economy. Research by business data company Civic Economics suggests the large big-box chain stores recirculate only about 13 percent of their revenue within the local markets that host its stores. While local independent businesses are usually easy to identify, it is important to remember that many of the smaller nationally-branded chains are actually operated by locally-based franchisees and appreciate your support.
Of course, most of our locally owned businesses are also small businesses. There are about 57,000 businesses in the Louisville MSA with the vast majority locally-owned small businesses and proprietorships. These local small business owners and their employees are our neighbors, community volunteers and youth league coaches.
Though a shopper may occasionally save money by purchasing from big national chains, there are tradeoffs to consider. Consider the added cost placed on the environment when we purchase items that are produced faraway, then transported to this area. Food shipped cross-country carries a much greater environmental impact than food grown on a nearby farm. And who could ever argue against the taste of locally grown farm products when compared to canned goods or produce shipped in from the coasts?
If you prefer to shop from your couch the good news is that many of our local small businesses have now a robust online presence. And a growing number of big companies that support ecommerce, like Amazon, Café Press and UPS, are part of Louisville’s robust logistics industry employing over 40,000 local people.
Most of us understand the importance of buying local as it relates to retail consumer purchases, but let’s not forget professional services. I’ve always found it curious that some companies hire New York law firms charging three times the hourly rate of our very fine locally-based law firms — firms that in many cases employ lawyers educated in the very same law schools. Same goes for accounting firms, architects, engineering companies, construction companies, consultants, and other professional service firms based here. Sometimes “50+ miles and a briefcase” should not be the primary consideration.
While purchasing managers are pressured to get the best prices, there is value beyond price in terms of cycle time, service and delivery costs that comes with using locally-based suppliers. If purchasing agents based here will make a concerted effort to use more locally-based suppliers it will lead to billions more flowing through our local economy resulting to even more jobs. This is particularly true when it comes to corporations buying from our local entrepreneurs and minority businesses, who oftentimes struggle to even get a meeting with purchasing. Buy-local is home-grown economic development that everyone can understand.
Finally, supporting our local businesses goes beyond buying their products and services; it includes backing businesses even when they stumble. Papa John’s Corporation is one of our region’s largest local headquarters, employing 2000 local people. This company deserves our support, not our scorn. No one excuses their founder’s remarks, but the If Papa John’s corporate future is threatened, so too is the livelihood of thousands of area families and other businesses that depend on them. Our region’s economic security is far more secure when our locally-based businesses are valued, and that is especially true for that precious handful of large public companies that choose to headquarter here.
There are many ways to approach economic development and many organizations, including GLI, working to grow our regional economy. Buying local and supporting local businesses is something each of us can do to accelerate the regional economy so businesses succeed and people thrive.