The world is getting smaller, and multinational corporations can now reach farther than ever before. While this may be great for consumers as it provides them with more products and services, it’s not always good for the community. While the digital world and global supply chains may serve shareholders’ interests, there are disadvantages of multinational companies. In an age where global tech giants monopolize markets, it’s become more imperative for consumers to consider the benefits of small businesses in a community.
Even in a time where there’s increased competition for a market share, small businesses seem to thrive in the US. In 2018, there were 30.2 million small businesses in operation, and on average, 543,000 new businesses open every year. Of these, micro-businesses (companies with less than ten employees) account for 75.3 of employers but only employ 10.5% of people in private-sector jobs. It’s also important to note that only 50% of small businesses survive for more than five years.
Why You Should Support Locally Owned Businesses
It’s common for populations in towns and cities to complain about losing a sense of community. As more mom and pop shops disappear, making way for large chain stores or retail outlets, it exacerbates this sense of loss. Often the rise of multinational corporations in a specific town or city can lead to a loss of identity. This is why it’s important for citizens to continue doing business with locally owned and operated companies. Here are four reasons why it’s better to support local companies.
1. Keeps Money in the Local Economy
Doing business with local companies will ensure the money stays in the local economy. This leads to shared prosperity in the community and increases the tax revenue of the city or town. With more taxes, the city can provide better services to its citizens. The city can also invest the money to improve the quality of life of people and develop community spaces for a greater sense of identity.
2. Creates Jobs and Opportunities in the Community
Supporting small companies creates more jobs and provides access to opportunities in the local community. There are also the added benefits of creating supportive supply chains by starting new businesses that further improves the local economy. While this will benefit the town or city, it’s also actually good for the environment. More people today understand the value of circular economies, and supporting local businesses is one way to promote less wasteful commercial practices.
3. Diverse Products and Choices for Locals
Local businesses always value the support they receive from their community. Owners will go out of their way to ensure a customer gets what they want. If the shop doesn’t have the item, they will direct the customer to another business (maybe even a competitor) who could have it in stock. Owners will also foster long-term relationships with their patrons, usually lasting for decades, and often, they blossom into close friendships.
4. Maintains a Sense of Community Character
The people who own and operate small businesses live in the local community. They attend the same community meetings, serve on the school boards, and invest in the local infrastructure. Small business owners share the same concerns and frustrations as other locals do and will actively participate in events that build the community’s character.
The Downsides of Doing Business with Multinational Corporations
Firstly, large multinational firms are often faceless. Instead of dealing with a customer’s needs, they enforce policies. This rigidity makes them seem uncaring and unwilling to respond to individual customers and their problems. Apart from losing a sense of identity when supporting multinational companies, there are three other reasons to do business with locally owned businesses instead.
1. Multinational Firms Puts Small Companies out of Business
It’s no secret that large multinational organizations put smaller companies out of business. By monopolizing markets, they make it impossible for locally-owned ventures to compete. Due to the economies of scale, their products and services are often cheaper than their local counterparts are, but customers should ask themselves if they are getting the same value from large corporations.
2. Profits go to Shareholders instead of Local Economies
Every dollar spent at a large international company will leave the local economy. Large corporations usually only pay taxes in a single jurisdiction, and all revenues go to their shareholders. This leaves the local community without the social investment they need to improve their city or town.
3. Imported Workforce and Resources
A common business model for large enterprises is to import resources and employees to the community. They also rarely support other local businesses. Instead of repairing a PC or device at a local shop, they will import new equipment from a central warehouse or supplier.
Why You Should Support Local Companies like DSI in Albuquerque, New Mexico
Document Solutions Inc. is a locally-owned technology company in Albuquerque, New Mexico. With multiple community engagement initiatives, DSI invests in the people, institutions, and other businesses that serve the population. DSI provides managed print solutions, document management systems, and other office technologies that help businesses thrive in a challenging climate.
To discover the advantages of partnering with DSI and to discuss the benefits of small businesses in a community, get in touch with one of our friendly agents today.