Financials and Cash Flow

Discover the benefits of purchasing locally

Supporting other entrepreneurs in your community can benefit your small business.

Published: December 08, 2014
Updated: January 27, 2017

When small business owners support their fellow entrepreneurs and buy locally, more money circulates in their communities and they make valuable business connections.

Small businesses located in communities with campaigns supporting local entrepreneurs, for instance, experienced over three times the average annual growth in revenue than businesses in areas without "buy local" initiatives, according to a 2014 Institute for Local Self-Reliance (ILSR) survey.1

Consider buying locally to boost your community, your fellow entrepreneurs, and your own small business.

The impact of buying locally

While national chains recirculate only 13.6% of their revenue locally, independent retailers do so with an average of 58%, according to a 2014 survey of independent businesses in New York's Hudson Valley by researcher Civic Economics.2

That's because larger retailers' money goes toward non-local supplies, taxes, wages, and other services.

Small businesses, on the other hand, keep more money in their communities by purchasing local products and working with local partners. Their effort to buy locally also increases employment rates, reduces environmental impact through decreased transportation, and cuts down on shipping costs.

Local vendors mean local connections

It might be cheaper to buy from big-chain retailers, but there's a lot that you'll miss out on — namely, a personal connection. If you've developed a personal relationship with the owner of a local office supplies company, for example, you might be able to expedite the printing of last-minute business cards if you request a personal favor of the owner.

With local vendors and suppliers, you can also meet with owners face-to-face — and you should. If you explain what you need in person, it might be easier for vendors to meet your expectations. Seeing their facilities firsthand will also give you a better sense of what you'll get.3

While larger retailers often have rigid price structures, smaller businesses might be eager to cut a deal if you're helping fill orders during their slow season.4 You could even secure lower prices with local suppliers by offering to reduce some of their expenses, like picking up the product instead of having it delivered.

Small businesses helping small businesses

Even if you can't cut a deal or aren't using a local company's services for your business, building these community relationships is an important part of networking.

From a marketing standpoint, if there's another local, non-competitive business you would like to support or that you work with, display its marketing materials in your store and praise it on Twitter or Facebook.

Not only are you supporting someone else's business, but he or she might return the favor. If that business owner starts broadcasting your services to his or her customers, you could tap into an entirely new customer base with little effort.

Going local for your business needs not only helps your company, but also the community you serve. Build local relationships to reach new customers and improve your reputation.


1 Institute for Local Self-Reliance 2014 study.

2 The Indie Impact Study Series- Hudson Valley.

3 Sacramento Business Journal: Relationship building is the key to finding vendors.