The Power of Local and Small Businesses on the Economy

If you are a regular reader of the Elizabethton Star then I’m sure you’ve recently been reading about our efforts to recruit new retail businesses to Elizabethton. As I’ve mentioned before, the benefits of shopping at Elizabethton retailers is key in making Elizabethton a better place to live.

The taxes on the products you buy in Elizabethton go directly back into the community you live in. It provides additional revenue for us to invest more in the community through roads, parks, and better services. It also provides additional revenues for our school systems to provide even greater educational opportunities for your children and grandchildren.

Today, I want to take this conversation to the next level – the local, small business. I’m sure many of you have heard that the money you spend more locally goes directly back into the local economy to create more money. This basic concept creates what is called the multiplier effect.

The multiplier effect happens anytime you make a purchase locally in Elizabethton, but there are varying degrees at which that money creates more money and more economic activity. Buying products from a chain retailer in Elizabethton will return 13 cents for every dollar you spent back into the community. However, buying products from a small business retailer in Elizabethton will return 48 cents for every dollar spent back into the community.

A similar paradigm can be applied to restaurants. In local chain restaurants 34 cents per dollar spent will be returned back to Elizabethton while local, small business restaurants return 65 cents back to Elizabethton. These numbers may not be exact for Elizabethton, but are based on numerous studies in other communities and give us a good idea of what can be expected.

When we apply the multiplier effect to these returns to our community, they will be multiplied by 2 to 3 times creating economic benefits to Elizabethton and Carter County! When we think of the impact that simply shopping local and at small businesses can do this is quite significant!

As we continue to grow our retail base in Elizabethton we strive to recruit new retail business as well as help new retail businesses start up. The real question becomes, what can we do to encourage shopping and patronizing our local, small businesses? Let’s talk about it!