Hug Your Local Independent Businesses This Week

Independence Day is over, but we should all still be celebrating "Independents Week," say the folks over at American Independent Business Alliance (AMIBA), a Bozeman, MT-based not-for-profit organization that helps communities organize local independent business alliances. This week, events across the country will celebrate the independent businesses that are the backbone of most local economies. I recently spoke to Jennifer Rockne, AMIBA's co-founder and director, about the importance of supporting local companies, the growth of independent business alliances, and the role that local companies play in a recovering economy.
BNET: Jennifer, since AMIBA was started 12 years ago, have you seen increased support for local businesses?

Rockne: In the communities with Independent Business Alliances, absolutely. We've seen that sustained, well-targeted public education efforts can help shift behavior over time. Three consecutive annual surveys by the Institute for Local Self-Reliance back that observation with empirical data. More broadly, there's certainly a public backlash against chain homogenization and major corporations extracting taxpayer subsidies that undermine market competition. Many people also have observed that communities based on a diverse array of local independent businesses have weathered the downturn much better than those which became dependent on a few giant absentee-owned corporations. But I'm not sure if that's translated into people shifting their personal and business spending to independent businesses in communities that lack local education and organizing efforts. I'm not aware of any attempts to measure that nationally.

BNET: Why is it so important for people to "buy local?" Small, local companies are often more expensive, making it tough for people struggling to make ends meet to patronize them. Isn't there a place for the Wal-Marts of the world in our economy?

Rocnke: While large chain businesses may win a competition based solely on cheapness, you'll often find a slightly higher price at an independent is due to higher quality offerings or service that's unavailable from a chain or web-only business. One example I've been looking at recently is computers. You can buy an Apple computer online and save about 5% off list price. At an Apple Specialist (a consortium of independent Mac dealers and service shops), you might pay list price, but the value is much greater. For just tens of dollars more, you get free set-up help, advice, in-house warranty service and more. We need to make sure we're comparing, um, apple to apples, because we'll often find a chain may be the cheapest, but the local business offers the superior value when we factor in the worth of our time, service provided, etc. We certainly don't suggest anyone struggling to make ends meet should not look for the best deal, but the old-saying of penny-wise and pound-foolish often applies to saving a few dollars on inferior products or services that cost more over their life cycle.

BNET: How can business alliances benefit small, local companies and their communities?

Rockne: First and foremost, by shifting culture. Independent Business Alliances raise awareness of the economic, social and cultural benefits local independent businesses bring us as individual customers and to us collectively as citizens. This helps shift both individual and institutional purchasing decisions, local policy, and investment. Local Alliances also help independent businesses compete more effectively via initiatives such as group branding, purchasing, marketing, space-sharing and other ways of gaining economies of scale without sacrificing their independence.

BNET: Have you seen an increase in the number of businesses alliances in the U.S. over the past several years?

Rockne: Yes, the number of new IBAs and inquiries has grown steadily over the nine years of existence. There now are 70 active IBAs in communities of all sizes and situations around the U.S. and in Canada. Dozens of other organizations have incorporated elements of our work and many more "buy local" campaigns exist that vary widely in their effectiveness.

BNET: Do you think that "Main Street" is coming back? Over the past ten years or so, I've seen small, depressed cities like Hudson, NY and Pittsfield, MA gradually come back to life. Do you think this is a trend and if so, what's behind it?

Rockne: I do think people are rediscovering Main Street. Many people hunger for community and personal interaction that largely is absent from the big box stores, doing business online, etc. There's also great work being done by many communities affiliated with the National Main Street Center to help drive this trend. Since AMIBA affiliates serve a broad range of business types beyond retail and restaurants, they promote independent business regardless of whether or not they are located in downtowns, but Main Street programs are great partners. We're also seeing recognition grow, even outside the communities we support, of the enormous public burdens created by sprawl and the economic as well as cultural value of neighborhood-serving business districts.

BNET: What role do local businesses play in an economic recovery?
Rockne: Though it's been turned into a tired political cliché, the truth is small independent businesses generate the bulk of American jobs. Smart public policy and administration focuses on nurturing opportunities for new entrepreneurs to form and grow. However we still see too many states and communities funding business recruitment and retention programs focused on "landing" major corporate facilities, yet don't balance the equation with staff responsible for facilitating local entrepreneurism.

There's no worse time for communities to enter the zero-sum game of luring absentee-owned businesses with subsidies of various forms. Co-working facilities, business incubators, entrepreneurial education, and micro-enterprise programs are the kind of investments we need to create net job gains, rather than simply reshuffling jobs from one locale to another.

Though AMIBA one day aims to shift the policy debate nationally, at the local level we're definitely seeing our affiliates shift political culture. I hope we'll see a day when elected officials gain more recognition for facilitating small business development than cutting a ribbon at a taxpayer-subsidized big box store or auto plant.

Image Courtesy of Flickr user Peretzpup, CC 2.0