Over the past five decades businesses across the country have been facing many challenges due to a variety of market forces, corporate consolidation and appropriation, the rapid upsurge of online commerce, as well as public policy decisions that have favored big business over small mom and pop shops. As a result, the number of small businesses started and sustained in the United States has been on a steady decline since the 1970s, a trend that economists are saying is slowing job growth.
While national businesses have a role to play in every economy, purchases from national corporations typically cause money to leave a local economy, as national chains and online purchases send money outside of the community to the areas where they are headquartered. This is to the extreme detriment to local communities, since study after study has shown that local businesses generate a substantial local premium, or added economic benefit, over corporate businesses.
Since 2013 Love Live Local has been communicating the importance of Cape Cod’s independent businesses and commissioned our own study, with support from local organizations like Cape Cod Five, Mid-Cape Home Centers and Nauset Disposal and nonprofits like Cape Cod Young Professionals and Duffy Health Center, to quantify and assess the impact of Cape Cod’s locally owned businesses on Cape Cod’s economy. The comparative survey and subsequent analysis show locally owned businesses consistently exceed their chain and online competitors in recirculating and investing their money in the local economy, thereby creating more local jobs and wealth.
The Local Matters: Measuring Impact study determined that local retailers and restaurants return 2-4 times more of their revenue to the local economy and provide more jobs per square foot than national chains. This is because when dollars are spent locally, they can in turn be re-spent locally, raising the overall level of economic activity, paying more salaries, and building the local tax base.
The analysis also showed that shifting 10 percent of spending to local retailers from national chain stores and ecommerce sites would put an additional $112 million in the local economy every year.
We felt like this was a very important moment to highlight the contributions of small, local businesses to the Cape Cod community, as so many of our local businesses are facing incredibly challenging times due to the COVID-19 pandemic; we wanted to remind both consumers and policy makers how important it is to support them in every way possible.
Because of their importance to the health of our community, we recognized that providing them with immediate financial relief would be vital when we were faced with the economic shutdown in the spring. This is why we created the Cape Cod Resilience Fund, which issues one-time grants of $500 to $2,000 to eligible Cape Cod small businesses to supplement day-to-day operational expenses. It enables Cape Codders near and far to invest directly in sustaining our most vulnerable small businesses and help keep them going during this extraordinary moment in history.
While many of our Cape Cod businesses cite great support from our local community and summer visitors through their patronage and words of encouragement, it is important to note that many of them are facing huge deficits due to the continued economic slowdown.
In the heart of our busiest season retail stores across Cape Cod have reported a decrease in sales anywhere from 20 percent to 70 percent, a locally owned B&B notes their business is down 30 to 35 percent, a bike rental shop is operating at 45 percent of their usual revenue, and a local restaurant has seen their revenue decline 70 percent from last year.
We continue to be concerned for our local businesses and their well-being, recognizing as this global health crisis continues, their need for financial support will likely increase. This is why we will continue to advocate for support at the local, state and federal levels, and to offer grants to as many local businesses as we can for as long as we can.
The Local Matters: Measuring Impact report reinforced what we already knew: small businesses are the cornerstone, the backbone, the heartbeat of any vibrant community and Cape Cod is no exception – the long-term economic sustainability of our region is tied to the fate of our small businesses.
Amanda Converse is the co-founder and CEO of Love Live Local. To read the full Local Matters report or to learn more about the Cape Cod Resilience Fund, visit lovelivelocal.com