I am constantly reminded how fragile communities and locally owned businesses can be. I recall a somewhat dated locally owned restaurant in our community that was open one day and gone the next. While the modestly priced restaurant needed some minor tweaks, it was a local favorite, a great place for a quiet dinner and an escape from the normal loud sit-down places many communities are stuck with today.

In conversation shortly before closing, the owner indicated business had become more difficult over the previous few months. They believed the recent opening of one of those sea-of-sameness national chain steakhouses in the community was the final straw.

I have no doubt this business could have been saved. In our discussions and analysis of their situation, it occurred to me that they had died a slow death by little setbacks. Of course, in their minds it was all outside influences that caused them to meet their demise. In thinking through the discussion, there is much more to it. A few simple tweaks of their business model — such as updated menu items, some marketing savvy and so forth — would have been enough to make a difference.

While updates might have helped, let’s break down how a community could have made a difference. In this case, what if only three additional couples or small groups had dined there each night? Their locally owned business would have survived. The success of most locally owned businesses typically doesn’t need a massive new consumer base to survive; just small upticks can be the difference between life and death. Think of it this way: If a restaurant has three additional couples dining there each night spending $200 among them, that is $200 in additional nightly income, or $1,400/week, over $6,000/month or approximately $72,000/year. For many small locally owned businesses, this means staying in business versus closing their doors.

Where does this leave this community? It certainly leaves a big void in the dining scene. It siphons off yet more money leaving the community to a distant corporate chain headquarters. In the case of this single restaurant, it siphons millions of dollars out of the community over time that would have generated much needed sales tax revenue. Additionally, it reduces the choices of the consumers as they are slowly being funneled toward out-of-town establishments that are more and more pervasive throughout smaller communities.

What can communities do to avoid this situation repeating itself around the country time and again? Solutions aren’t that difficult. We all must take more interest in our locally owned businesses. We need to be more proactive and not only frequent them more often, but also provide constructive suggestions on how they can better serve or meet the demands of their customer base. Likewise, locally owned businesses need to be in tune with consumer demands and do their best to not only understand them but strive to meet those demands. Change is the name of the game if you are in business.

There are four types of ways we spend our money:

We leave our community and spend our money in a distant community.

We shop online from the luxury of our homes where all the money leaves the community.

We frequent non-locally owned business establishments where all the profits leave the community.

We commit to frequent locally owned and operated business establishments. The first two options will kill your community rapidly. The third will kill your community slowly. The fourth is the only sure way to grow your local tax base and thus create a more vibrant community. That isn’t opinion; this is simple math and logic. Finding your local spending balance is critical.

John Newby 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 john@360mediaalliance.net.

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