There was a very nice yet somewhat dated locally owned restaurant in our community that was open one day and gone the next. While the modestly priced restaurant needed a few minor tweaks, it was still a great place for a nice quiet dinner and an escape from the normal loud sit-down places many communities are stuck with today.
Having had a conversation with the owner shortly before closing, they conveyed business had become very difficult over the previous few months. They believed the recent opening of one of those “sea-of-sameness” national chain steakhouses in the community was the final straw that did them in.
In our discussions and analysis of their situation, it occurred to me they had died a slow death by little setbacks along the way. Of course, in their minds it was all outside influences that caused them to meet their demise. In thinking through the discussion, there is much more to it as well. A few tweaks with their business model such as updated menu items, some marketing savvy and so forth might have been what was needed to make a difference.
Could those updates and changes have made a difference? In this case, it would have only taken two additional couples or small groups dining there each night that would have saved their locally owned business. The ultimate success of most locally owned businesses typically doesn’t need a massive new consumer base to survive; just small upticks can be the difference between life and death. Think of it this way: If a restaurant has two or three additional couples dining there each night, that is $200-$300 additional income each night or $2,100 per week, or $8,400 per month or approximately $100,000 per year. To a small locally owned business, that means staying in business or closing the doors.
Where does this leave the community? It certainly leaves a big void in the dining scene. It siphons off yet more money that will leave the community to some corporate chain headquarters in a distant city or state. In the case of this single restaurant, over time, it takes millions of dollars out of circulation that would otherwise be circulating throughout the community generating sales tax revenue. This also reduces the choices of the consumers as they are slowly funneled toward out-of-town establishments that are becoming more and more pervasive throughout smaller communities.
What can communities do to avoid this situation repeating itself around the country time and time again? The solutions aren’t that difficult. We all need to take a bigger interest in our locally owned business establishments. We need to be more proactive and not only frequent them more often, but also provide constructive suggestions on how they can better serve or meet the demands of their customer base. Likewise, locally owned businesses need to be in tune to their consumer demands and do their best to not only understand them but strive to meet those demands. That means change is the name of the game if you are in business.
We must all realize there are four types of ways to spend our money. One is to leave our community and spend it in a distant community. Two is to shop online from the luxury of our own homes. Three is to frequent non-locally owned business establishments. Four is to frequent locally owned and operated business establishments. The first two options will kill your community rapidly if done in excess. The third will kill your community slowly via death of a thousand paper cuts. The fourth is the only sure way to grow your local tax base and thus create a more vibrant community. That isn’t opinion, this is simple math and logic. Finding that local spending balance is critical.
As stated, there needs to be a balance. Let us all take stock of our communities. Let us all think, what can I do to assure our locally owned business base is surviving? If we all think and act through this together, there is little that can stop your community from reaching its fullest economic potential. If we don’t think and act this through, there is little you can do to stop the ultimate demise of your community.
John A. Newby is the author of the "Building Main Street, Not Wall Street" column and consulting group dedicated to helping communities and media companies build synergies together. Both must not only survive but thrive in a world where local is lost to Amazon and Wall Street chains. His email is john@360MediaAlliance.net.