Shop local is a popular phrase these days. But what does that mean? And why is it important? Supporting your local economy and keeping capital in the area can be a great benefit for the community. These businesses help shape neighborhoods, create jobs, and preserve the character that makes each place unique. In the United States, the Saturday after Thanksgiving is Small Business Saturday, a day that highlights the importance of supporting local shops rather than focusing solely on big-box stores and online retailers. However, the value of shopping local extends well beyond any holiday.

Local Multiplier Effect

The local multiplier effect is where every dollar spent at locally owned businesses circulates more and generates more economic activity than a dollar spent at national chains or online retailers. This means that small businesses can return up to three times as much money per sale to the local economy as large chain competitors can.

Small, independent businesses are more likely to purchase goods and services from local suppliers and distributors in their communities. They are also more likely to hire in their immediate communities and do business with local banks. So, in essence, shopping at local businesses creates more revenue for small businesses and more jobs.

Other Benefits

Aside from the economic benefits, supporting local businesses offers many other benefits. For example, many small businesses boast better customer service, as they are deeply connected to their communities. Small businesses can be more innovative than larger companies and provide unique products and services. The small-business community also brings new ideas and options to consumers, helping keep communities alive.

According to Forbes, shopping local offers additional benefits:

• Preserves local charm. Local and independently owned shops, restaurants, and makers embody the individuality of the neighborhoods that they serve.
• Boosts advancement and product diversity. Small businesses thrive on innovation and creativity. Compared to large corporations, small businesses can more readily change to meet customer needs. They can also provide a variety of products that reflect their brand, which promotes diversity and innovation.
• Limits environmental impacts. By using local goods, small businesses can rely less on transporting goods, which reduces emissions. They also consume fewer resources and, therefore, have less product waste.

Shop Local All Year

Even after the dust settles during major holiday shopping sprees, consumers should always remember to give small businesses a try. Shopping at local businesses helps to preserve the growth and sustainability of communities everywhere.