Wednesday WTF: July 12, 2017
Buy Local You Jackass!!
Welcome back to Wednesday WTF, my weekly rant on things that waste your money. This week is all about small business here at Budget Boss, so today is going to be about buying local and supporting these small businesses. Everyone talks about it and how important it is, but do we truly know why supporting small business is important. Economies are built on micro and macro levels of interactions. The world at your doorstep is based on micro-interactions that happen at the street level right in your community. Chances are what happens in you neighborhood is important to you so in this post I will go over why buying local is very, very, very important. Very!
1) You see the direct impact of your dollars
The headquarters of Walmart is in Bentonville, Arkansas. Yeah, I don’t know where that is either. Starbucks is in Seattle, Washington. Budweiser is located in Leuven, Belgium. McDonald’s is in Oak Brook, Illinois. Fire Roasted Coffee is located in London, Ontario. Anderson Craft Ales and Forked River Brewing Company Brewing, London, Ontario. Illbury + Goose are in London, Ontario. The Bungalow and The Morrissey House restaurants, yeah you guessed it, London, Ontario. These places hire local people, pay local taxes and live in the community themselves. People who work at local businesses spend their money locally which helps other local businesses. People who pay local taxes help all of us by allowing the city to perform local initiatives. Yes, that pothole that got filled in front your house was filled by the burger bought next door. Local business leaders have a stake in the community that supports them as well. This means that they are apt to look after this community and therefore become key voices in the neighborhood. It has been said that $68 dollars of every $100 spent locally stay within the community. That is in contrast to $43 spent at large chains. That is a huge difference, so spend wisely.
2) There are faces behind the names
Unique people bring unique businesses into your community. They also hire people that become fixtures of the neighborhood. I know this from firsthand experience. When people frequent their business they can then pay their employees better wages. When they pay their employees better wages they can then buy homes in the community. By buying the burger next door you have essentially helped a person you know to buy a home. When you shop at Wal-Mart you help a CEO buy a yacht. The owners of these businesses are on your local neighborhood watch, local parent-teacher association and in your local governments. They sponsor local sports teams and support other local businesses. Because it is so intertwined in your community you can count on better service because what they are selling is a relationship. They are not based on sheer volume like the McDonalds’ of the world; each person means the world to them. Also by buying locally, you are helping to combat unemployment where you live which in turn makes the city a more desirable place to live.
3) Competition and Monopolies
Other than the board game, I hate monopolies. Very few places controlling the market for a given product means that they can also control the price. Think of your cell phones or even hydro. Hundreds of small businesses in an area can allow for natural competition to occur. You find higher prices at small businesses sometimes because they cannot compete with the larger chains. If they were to experience higher volume due to consumer diligence they could then pass savings on to you. Only by supporting local businesses can you experience what is a natural order of competition. Large chains have disrupted local economies by creating a model that drives out small business. It therefore artificially creates a value for their products that doesn’t reflect the actual value of the product. So when you think you are getting a deal, you really aren’t. Supporting local is actually cheaper and far more effective.
I always try to practice what I preach so for me supporting local is essential. I live, work and play in Downtown London and very rarely leave the area to get goods. I preach to people to use their dollars as a weapon to better their lives through investments and insurance. Today I am preaching using your money as a weapon to better your community and those within it. If you don’t believe me take a walk through Downtown London. Those vacant buildings are due to the urban sprawl created by city planners in the past few decades. Strip Malls and shopping centers at the edges of the city force Londoners into their cars taking their dollars with them. This causes pollution and habitat loss. A vibrant urban center allows for compact, walkable, sustainable living areas. These businesses are vital parts of the community that if frequented can pay very livable wages. The minimum wage debate would then be redundant for these owners as they would have that aspect covered. There is absolutely no downside to supporting local but very many downsides to not doing so.
Thanks for reading my post today and don’t forget to tune in tomorrow for “Thursday Trim the Trash,” my weekly post on things you can eliminate that cost you money. Have a great day friends!
“We need to preserve our neighborhoods, our small business, our local economy.” – Maria Semple
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Joseph James Francis is a Financial Advisor. You can find him on various social media platforms and at www.budgetboss.ca.