In discussing the critical nature of keeping our dollars local, local businesses must also do their part and provide products, services and experiences worth our dollars.

While we write about ways for businesses to provide a better customer experience in the coming weeks, this column will stress the need for your community to rapidly create a truly local community mentality, or DNA. Being truly local isn’t just a nice thing to do — it is critical for the survival of your community.

In the end, it comes down to facts, figures and logic:

Numerous studies show dollars spent with locally owned businesses recirculate throughout your community between three and seven times. This is compared with those same dollars being spent with national chains, which circulate just once. Using a 10% sales tax as an example, $1 million spent with out-of-town chains will return $100,000 in sales tax to your community, versus $300,000 to $700,000 when being spent with locally owned businesses that re-spend or compound those dollars. Those differences equate to real jobs for real communities.

Owners of locally owned businesses support local causes, organizations and charities by a 3-1 margin over businesses with outside ownership. The foundations of many communities are built through active volunteerism, nonprofit organizations and civic groups. This is a vital component to thriving communities.

Owners of locally owned businesses are four times more likely to be involved in leadership, politics, chambers, Main Street and economic development organizations in their communities than businesses owned by people outside of town.

Recent studies show a community’s poverty rate is directly linked to the percentage of prosperous locally owned businesses. The more local innovation, creativity and entrepreneurship, coupled with active support of such by the community’s various government entities, the greater the expectation for an increase in the average household income. The greater the percentage of retail dollars spent with out-of-town business owners within a smaller or midsized community, the higher the poverty rate.

The greatest return on investment on community revitalization is the community’s downtown district. Tax dollars as well as private investment in your downtown bring an average of 30% higher return than investment in other parts of the city. Communities neglecting to restore their downtown district risk damage to the entire community.

It has been shown that by returning the vibrancy, heart and soul of your community to the downtown, you can also expect to see an increase in surrounding real estate values as well. This creates renewed pride in the community, grows the real estate ad valorem tax base, which benefits the school and the entire community.

The question is one of balance. Cities finding ways to balance the growth of chain stores within the community along with the growth and support of the truly local business segment will find an economic balance that leads to great prosperity.

In addition to balance, it is also about creating uniqueness in your community, something that only a truly local concentration can do. It is that uniqueness that will be vital in the new and emerging economics of your community.

John Newby, of Pineville, is author of the “Building Main Street, Not Wall Street” column dedicated to helping communities combine synergies with local media companies allowing them to not just survive but to thrive. His email is

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