“All progress takes place outside the comfort zone." - Michael John Bobak
I was recently reminded of just how fragile communities and locally owned businesses can be. There was a very nice, yet somewhat dated locally owned restaurant in our community that was open one day and gone the next. While the modestly priced restaurant needed a few minor tweaks, it was still a great place for a nice quiet dinner and an escape from the normal loud sit-down places most are stuck with today.
Having had a conversation with the owner shortly before closing, they conveyed that business had become very difficult over the past few months. They believed that the opening of one of those ‘sameness’ national chain steakhouses in the community was the final straw that did them in.
In our discussions and analysis of their situation, it occurred to me that they had died a slow death by little setbacks along the way. Of course, in their minds it was all outside influences that caused them to meet their demise. I’m thinking, through the discussion, that there is more to it as well. A few tweaks with their business model such as new menu items, some marketing savvy and so forth might have been all that was needed to make a difference.
In this case, it would have only taken two additional couples or small groups dining there each night; that would have saved this locally owned business. The ultimate success of most locally owned businesses typically doesn’t need a massive consumer base to survive; just small upticks can be the difference between life and death. Think of it this way, if a restaurant has 2-3 additional couples dining there each night, that is $200 - $300 additional income each night or $2100 per week, or $8400 per month or approximately $100,000 per year. To a small locally owned business, that means staying in business or not.
So where does this leave a community. It certainly leaves a big void in the dining scene. It siphons off yet more money that will leave the community to some corporate chain headquarters in a far off state or country. In the case of this single restaurant, it takes millions of dollars out of commission that would otherwise be circulating throughout the community generating sales tax revenue each year. It reduces the choices of the consumers as they are slowly funneled towards out of town establishments that are becoming more and more pervasive throughout smaller communities.
What can communities do to avoid this situation repeating itself time and time again? The solutions aren’t all that difficult. We all need to take a bigger interest in our locally owned business establishments. We need to be more pro-active and not only frequent them more often, but provide constructive suggestions on how they can better serve or meet the demands of their customer base. Locally owned businesses need to be in tune to the consumer demands and do their best to not only understand them, but strive to meet those demands. That means change is the name of the game if you are in business.
We must all understand there are four types of ways to spend our money. One is to leave town and spend it in a distant community. Two is to shop online from the luxury of own home. Three is frequent non-locally owned business establishments. Four is to frequent locally owned and operated business establishments. The first two options will kill your community rapidly if done in excess. The third will kill your community slowly via death of a thousand paper cuts. 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.
As with everything, there needs to be a balance. Let us all take stock of our communities. Let us all think, what can I do to assure our locally owned business base is surviving. If we all think this through together, there is little that can stop your community from reaching its fullest economic potential. If we don’t think this through, there is little you can do to stop the ultimate demise of your community.
John A. Newby is the author of the "Building Main Street, Not Wall Street" weekly column dedicated to helping local communities keep their consumer dollars local. He can be reached by email at: john@UniquelyUSA.net