OK, you get it, I know. You understand the logic behind supporting local businesses. It makes sense after all – their money will circulate locally to other local suppliers. They will spend locally on houses, cars, and restaurants. They will advertise, sponsor, and invest locally. In general, a local business and its ownership will directly benefit the local economy and those residing in its environs.
Let’s now try and find some form of recognition or criteria to determine what in fact constitutes a local business and whether some might be more deserving of your support than others. Then, the elephant in the room, if a local business seeks local support, what best-practices should they apply as far as supporting local business themselves. By way of explanation, you as a local business seek local support but where are you sourcing your own supplies?
The perfect example
For the discussion, let’s give those businesses who fall into this description, three stars. This would typically be a non-franchised, owner-driven business. The owner resides locally and gives of his expertise and energy to offer goods or services to the nearby community. In seeking the support of local residents, he, in turn, commits to the local community by employing staff and sourcing his equipment and raw materials from nearby suppliers wherever and whenever possible. During successful business periods, the owner’s commitment to the local community will usually show in the form of support to local charities, schools, sports clubs, and community activities.
Some examples here might be your hairdresser, a local bakery, a locally owned, un-franchised hardware store, restaurant, coffee shop, or Hotel.
Variations of the above example would be the owner-run franchises of which there are many. The owner (the franchisee) purchases the right, under certain conditions, from the franchisor, to operate using their brand identity, adopting their procedures and systems. On the one hand, the franchisee qualifies as a locally owned and operated business, but on the other, he pays huge sums of money to the franchisor and purchases most of his goods either from the franchisor or their appointed supplier, either of which is often located in other economic communities.
The business is locally owned for sure and yes, some of the benefits remain within the community. A few characteristics go against them, however. These will vary between franchises able to commit more to local supply chains and our economy than others. The writer, for example, has personal experience with some of the locally owned supermarket franchise stores where the local owners show a determined effort to support local suppliers. While these could go up a notch in our grading system and deserve consumer support, there are unfortunately other examples, in particular some food franchises, where as much as 90% of the goods and equipment are sourced from out of town.
For the purposes of this article, let’s award this category two stars, and allow a half-star variation, up or down.
Walking the talk
The imposters, let’s generously give them one star. For illustrative purposes, I will share one of my own experiences. I am sure that if these businesses do this to one supplier, it’s a business philosophy they will apply repetitively.
The approach by us all, as consumers firstly, and business owners secondly, should be that, provided an item or a service meets the targeted price and quality standards and is readily available locally, we should support that business. Yes, it really is that simple!
When offering our Cutman & Hawk coffee products to a potential business customer we usually do a blind tasting of four samples. One sample is usually from the customer’s current supplier, two from other random suppliers, and the fourth, being the one offered by us.
To put this in perspective, our locally produced product has yet to even come second in a taste test – it’s a first every time! We tick all the other boxes and have gained many loyal customers. Yet, there are a few well-known local businesses in our industry that won’t even allow us to submit a proposal. Whilst acknowledging that this is their absolute right, it would be very interesting to understand the thought process behind this.
The death of a business sector
As with many examples in the animal kingdom, the expiration of time coupled with a change of some form, can result in extinction. Like poachers killing the pangolin, shops in fuel station forecourts have all but rendered the corner grocer extinct. Our local motor dealerships are mostly owned by large national companies, labour prices have reached ridiculous levels, some at over R800 per hour. When last did you actually talk to the technician who worked on your vehicle?
National franchises dominate malls and forecourts, both by securing national deals and blocking local business. Our local newspapers are printed over 300 km’s away and one can but wonder when this industry will go 100% electronic. Most of our grocery items are shipped from Port Elizabeth by truck. Online shopping is growing by the day, especially in certain sectors. Change is upon us.
Before I go
We have defined the criteria for supporting a local business and touched on the reasons. Some businesses have already died or are dying, which one is next? Which ones need to effect urgent change in order to survive?
There are some businesses that are more affected than others and one sector which deserves a specific mention. The local restaurant industry is one that is under stress. Aside from the effect of ongoing COVID-19 restrictions, many small businesses literally operate on a hand-to-mouth basis. Income that is generated in one month is usually required to pay the costs incurred within the previous month.
I personally know of three locally owned restaurants that will never open again. A local restaurant, one typically committed to good quality food made from whole, superior personally selected ingredients, finds themselves up against the cut price, usually chemically enhanced, bulk offerings. This ongoing price war, one which puts a low-cost food preparation system up against handmade freshly prepared fare, is always going to be lost by the smaller business.
Let’s add to this the penchant of the smart-phone generation to buy tons upon tons (I do not exaggerate) of fast-foods and to either collect these from a drive-through or to have this delivered by an e-delivery service. Between the pricing pressures and the e-generation, will our locally owned restaurants survive? Can the e-delivery generation not see that homemade quality will trump frozen offerings every time?
I for one hope so and I unashamedly, on behalf of each and every locally owned business, in every sector, ask you give some thought to our local economy before you make your next buying decision.
“Tough times never last, but tough people do.”Robert H Schuller
Alan Hawkins is the chief roaster and founder of the East London Coffee Co. www.elcoffee.co.za
You can view their entry on the Local Yokel Business Directory Page here.