SIX Reasons to GO LOCAL

Aug. 4, 2022

Get the Facts and Take Action!

Fires, floods, and pandemic have hurt Sonoma County businesses.

Here are some of the many benefits of spending your dollars locally!

Graphics available for member use - see bottom of page.



Put your money where your heart is.

Communities with a larger share of local businesses have a stronger web of economic and social relationships, higher levels of civic engagement, and better success solving problems.

Local businesses foster community cohesion and well-being. The social fabric of a community is tightly coupled with the health of its independent businesses. Research has shown that communities with a larger share of local businesses have more social capital, stronger social ties, higher levels of civic engagement, and better success solving problems.

Locally owned businesses build strong communities by sustaining vibrant town centers, linking neighbors in a web of economic and social relationships, and contributing to local causes. Local ownership ensures that important decisions are made locally by people who live in the community and who will feel the impacts of those decisions.

A 2011 study from the Cambridge Journal of Regions, Economy, and Society, for example, found that areas with a greater concentration of small businesses, all else being equal, have improved public health outcomes than those with fewer small businesses.[5] The authors speculate that local ownership of business enhances a community’s capacity to solve problems. Other research has found the presence of independent retailers helps communities retain their residents, especially those with college degrees.[6]

Taken together, these studies show that cultivating a vibrant independent business sector not only strengthens the economy; doing so can advance social goals as well.


Our strength is in our diversity.

Communities with a larger share of local businesses foster more diverse, unique and equitable communities (of diverse cultures, ethnicities, gender, age, orientation, & other background), and are linked to higher incomes and less inequality.

Enacting policies that strengthen small businesses and expand opportunities for local entrepreneurs is one of the most effective ways of reducing inequality and expanding the middle class.

In 2013, for example, an economist at the Federal Reserve Bank of Atlanta found that counties with larger shares of local small businesses outperform their peers on three critical economic indicators: they have stronger per capita income growth, faster employment growth, and lower poverty rates.[1]

Using two decades of data from a number of countries, another study found that areas with more small and mid-size businesses had lower levels of income inequality.[2]


Neighbors supporting neighbors.

Regions that achieve higher rates of entrepreneurship and new business creation than the national average are better off. They generate more jobs, which in turn lifts wages, and makes for a more stable community. 

Across the country, the rate of new business formation has fallen sharply over the last 20 years, contributing to sluggish job growth and wage stagnation. “New businesses account for nearly all net new job creation,” concludes a Kauffman Foundation research brief.[3]

Regions with a higher share of locally owned businesses create more jobs and, in some sectors, provide better wages and benefits than online mega retailers and non-local chains do.

While cities may be tempted to focus only on tech startups, expanding opportunities for residents to launch businesses that meet community needs in retail, services, food production, and other sectors can have even greater impact.

Entrepreneurship fuels America’s economic innovation and prosperity, and serves as a key means for families to move out of low-wage jobs and into the middle class. A marketplace of tens of thousands of small businesses is the best way to ensure innovation and low prices over the long-term. A multitude of small businesses, each selecting products based, not on a national sales plan, but on their own interests and the needs of their local customers, guarantees a much broader range of product choices.


Buy good things from REAL people.

Compared to online mega-retailers and non-local chains, locally owned businesses reinvest a much larger share of their revenue back into the local economy, enriching the whole community.

While most small businesses were deemed non-essential in recent months, many major chains and online retailers increased revenue by 50% or more.

Locally owned businesses recycle a much larger share of their revenue back into the local economy compared to chain stores and online mega retailers, enriching the whole community.

Locally owned businesses in dense, mixed-use commercial districts generate more tax revenue for cities than sprawling shopping centers, while also costing less in public services.

An analysis from the Government Finance Review, drawing on data from a sample of 30 cities in 10 states, found that a community earns about $7 in property taxes per acre on the average big-box retail store, compared to $287 per acre on a mixed-use, mid-rise business district.[4] The compact nature of these districts also means they make more efficient use of public infrastructure and services.


Put your money to work locally.

Using a locally based financial institution puts your money to work growing the local economy, and backs businesses that share a commitment to our community.

Bank Local to:

  1. Get the same services at lower cost and often with better customer service
  2. Put your money to work growing your local economy - local banks provide more loans to small businesses than the big banks.
  3. Keep decision-making local
  4. Back institutions that share a commitment to your community
  5. Support productive investment, not gambling

Community banks are an integral part of Main Street; they reinvest local dollars back into the community and help create local jobs. Their relationship banking philosophy is ingrained in the way they conduct business, one loan—one customer—at a time. Local reinvestment helps small businesses grow and helps families finance major purchases and build financial security.

Community banks also are nimble in using new technology platforms, supporting emerging methods of payments and advocating tougher security standards to protect small-business owners and customers from hackers and other criminals.

What Sets Community Banks Apart
Local Focus: Unlike larger banks that may take deposits in one state and lend in others, community banks channel their loans to the neighborhoods where their depositors live and work, which helps local businesses and communities thrive.
Relationship Banking: Community bank officers know their customers and may consider family history and discretionary spending in making loans. Megabank loan officers apply impersonal qualification criteria, such as credit scoring, without regard to individual circumstances.
Innovation: As high-tech, high-touch local financial institutions, community banks work with their customers to ensure they have access to innovative products and services while partnering with and investing in financial technology providers. A prime example of community bank innovation is showcased through ICBA’s ThinkTECH Accelerator.
Lending Leadership to Small Business: According to the Federal Reserve’s Small Business Credit Survey: Report on Employer Firms, community banks are the small business lender of choice.
79 percent of independent businesses that used community banks report they were satisfied with their overall experience, compared with 67 percent for large banks and just 49 percent for online lenders.
Timely Decision-Making: Community banks offer nimble decision-making on business loans because decisions are made locally. Megabanks must often convene loan-approval committees located in another state, far away from their customers.
Community Engagement and Accessibility: Community bank officers are typically deeply involved in their local communities, while megabank officers are often detached from the communities where their branches are located.

As local small businesses themselves, community banks only thrive when their customers and communities flourish. They answer to Main Street. Megabanks are driven by shareholder value and answer to Wall Street.

Often referred to as America’s Favorite Lenders, community banks:


It’s not just a trend, it’s a sustainable solution.

Communities with a larger share of local businesses help to sustain downtown and neighborhood commercial districts, reducing pollution and improving environmental sustainability.

Independent businesses help to sustain compact downtown and neighborhood commercial districts, which curb sprawl and automobile use, and enable residents to fulfill more of their daily needs close to home.

Local stores help to sustain vibrant, compact, walkable town centers-which in turn are essential to reducing sprawl, automobile use, habitat loss, and air and water pollution.

Several studies have found that people who live near small stores walk more for errands and, when they do drive, their trips are shorter.

That’s not all: small retailers also influence how likely people are to take public transit. A study of 3,200 households in King County, Wash. (Seattle area), for example, found that residents of neighborhoods with the most local businesses logged 26 percent fewer automobile miles than people living in areas with few neighborhood stores, and they were significantly more likely to take public transit to work.[7]


Find more details about the studies mentioned here, and others, by going to the Institute for Local Self-Reliance’s resource page — Key Studies: Why Local Matters. Additional resources about the importance of independent businesses to the local economy can be found on their Why Local page.

[1] “Locally Owned: Do Local Business Ownership and Size Matter for Local Economic Well-being?” Anil Rupasingha, Federal Reserve Bank of Atlanta. 2013.
[2] “Wage Inequality and Firm Growth,” Holger M. Mueller et al., LIS Working Paper, 2015.
[3] “The Importance of Young Firms for Economic Growth,” Jason Wiens & Chris Jackson, Entrepreneurship Policy Digest, Kauffman Foundation, 2015.
[4] “Thinking Differently About Development.” Joe Minicozzi, Government Finance Review, 2013.
[5] “The Health and Wealth of US Counties: How the Small Business Environment Impacts Alternative Measures of Development,” Troy C. Blanchard, et al., Cambridge Journal of Regions, Economy, and Society, 2011.
[6] “Socially Responsible Processes of Small Family Business Owners: Exploratory Evidence from the National Family Business Survey,” Margaret A. Fitzgerald, et al., Journal of Small Business Management, 2010.
[7] “A Study of Land Use, Transportation, Air Quality, and Health in King County, WA,” Lawrence Frank and Company, The Neighborhood Quality of Life Study, Center for Clean Air Policy, GeoStats, & McCann Consulting, 2005; “Neighborhood stores: An overlooked strategy for fighting global warming” Stacy Mitchell, Grist, 2009.

GO LOCAL Business members can download a zip file of these graphics HERE.

Zip file includes all 6 themes, each with a social media-sized square file.