Chennai
Its time to support Local
Introduction
We would have often wondered how different kinds of business models have had a profound impact on our lives and society in general. When liberalization happened in India in the 1990’s, slowly our lives took a huge turn both socially and economically. The business model suddenly changed. We were introduced to the modern economy. This brought in a huge shift in doing not only business but also exposed us socially to the global world. And we all embraced it for the kind of benefits it gave to the general public albeit after initial reluctance.
Why should we support local businesses
What liberalization brought was big business houses and their ways of doing businesses be it multinational brands or the big national businesses who adapted to the ways of the multinational brands. There have been benefits of big brands. But there are downsides of it as well. We are not going to dwell on the downsides of these big business houses here. But we will look into what we are losing by supporting big business over supporting small local businesses and the benefits of supporting small local businesses for ourselves as well as for our local community.
Benefits of local businesses for us
We should support small local businesses not only because of the benefits to the local community but also because in the long run it will be beneficial for us personally. We will take a look at the advantages to us as well as to the local community if we support local businesses.
Local businesses supports local economy
Local businesses are most likely to hire other local businesses for their needs, be it any service or products or raw materials. On the other hand big businesses are more likely to hire other big businesses for their needs than hire local businesses. Various studies have shown that local businesses pump in more than 60% of the money they earn back into the local economy. But big businesses are likely to pump in just about 40% of the money earned into the local economy. Thus local businesses support and help the growth of the local economy more than big businesses.
Creates entrepreneurship opportunities
As local businesses are more likely to give business to locals for their needs, it creates opportunities for budding entrepreneurs in the local community. Entrepreneurship gives more satisfaction than positions in big companies. Big business tend to create less new entrepreneurship opportunities for the local community as they tend to do business with other big businesses.
Employment Opportunities for locals
Small local businesses employ more people than big businesses. With automation and mass production, big businesses offer less employment opportunities than small businesses. Taking the example of the production of motor pumps, a big business with automation produces a pump with only eight people. But the same pump produced by a small company requires twenty four people. Thus a small company is able to give more employment opportunities than big businesses. There is no doubt that automation is the way forward but in a country like India with a huge youthful population, automation will render more youths jobless. Also local businesses are more likely to hire locals than big companies. The employment opportunities to the locals will make them grow and put money in their hands. It also creates harmony and peace in the local community as more locals are employed.
Local businesses are more accountable and give good customer support
In small local businesses most of the owners are fully involved in all the processes of business. They oversee every process in their respective businesses be it in production, post production processes or in sales. Whereas in big businesses, most of the work is taken care of by the employees. This does not in any way mean that the employees are inefficient in big businesses. But the owner overseeing every process brings in his expertise and experience in each process which is missing in big businesses.
Small local business owners usually have good rapport with their customers and thus provide good customer care service and are more accountable to the local community. People running local businesses are from your neighbourhood. They care about the local community and look after it’s well being more than larger business houses. And this translates to good customer service. Also with a small customer base they provide us with good customer care service to make themselves compete against big brands. On the other hand big businesses employ people to take care of customer service. Even if they provide good customer service, the lack of involvement of the owners takes away the personal touch and care with which the big companies serve their customers.
We know where the product is coming from
When we buy locally we know where the product is coming from. And the effort that has been put into making the product. We can get to know the quality of the ingredients that are used in the process. Especially in the case of local farmers. We can get to know whether fertilizers or pesticides have been used or the produce is organic. Certified branded organic food is available in the market but at a huge price above the conventionally produced food. If we shop from local farmers we can get the same quality of the branded organic foods at a much lesser price.
Lesser carbon footprint
Local companies have a smaller carbon footprint than bigger multinational companies. If we buy from local businesses, the production is done locally and distributed and sold locally. This reduces carbon footprint as the products need not be shipped from long distances which increases pollution. Big businesses usually mass produce in a region and distribution is done all over the country or some even all over the world. This involves moving the produced goods from the factories by transportation to distribution centers and then from distribution centers to retail stores. This involves transportation across long distances which contributes to more pollution than small businesses. Hence small businesses are better for the environment. Thus by buying locally we will be doing our bit for the environment.
Unique products
Local businesses offer unique products and services. They use their creative skills to either modify traditional products or make entirely unique products to compete against big brands. Shopping locally will get us to these unique products which can never be seen with big businesses as big businesses are more keen on mass production of well moving products over uniqueness. So if we go to the local stores we can get unique and artistic products. We also get traditional products which are unique to the culture of the place.
Quality products
Big businesses start off very well in terms of quality but overtime the quality of the products may get bad. But still it manages to do good business because of its established brand name and marketing strategies. On the other hand small businesses make sure that quality is maintained. As they have a small customer base to cater to, they make sure each and every process in their business is well taken care of. Thus quality is ensured in the case of locally made products.
Wealth Distribution
When we buy from big brands wealth is accumulated in the hands of a few big entrepreneurs. But when we buy locally we help to flourish the local economy. Which brings money into the hands of local people. And thus wealth gets distributed among the local population. When wealth is distributed locally to a lot of people instead of a few big entrepreneurs, it creates more jobs as well as entrepreneurship opportunities locally helping us in the long run.
What can we do to help local businesses
First and foremost we can buy from them wherever we can. Most of the time we don’t even know what is available in our neighbourhood stores. We go blindly by the brand names when same or even better qualities may be available locally. By searching for things and services that we need locally instead of going for big brands, we can help local businesses.
Even if we don’t buy from the local businesses we can spread the word about the availability of things that we may have seen in local stores. We can spread the word in our family and friends circle who may be in need of it wherever and whenever we see them.
With the advent of social media, e-commerce has really helped local businesses immensely. We can follow them in social media and share their posts to spread the word amongst social media users. This will create awareness about the various products and services available locally. This would help the local businesses immensely.
Effects of lockdown for covid -19 on businesses
Lockdown, the step which many countries around the world have taken to contain the spread of the COVID-19 virus (along with aggressive testing and isolating people who have tested positive) is the best way to contain the virus until a cure or vaccine is found. But this lockdown has a huge effect on businesses. Businesses around the world be it big businesses or small businesses have been equally affected by the lockdown.
Effects On Big Businesses
Big factories employ a high number of workers for mass production in their big factories, the possibility of spread of covid-19 in these factories amongst workers is huge. Even if one worker becomes covid positive, the entire unit needs to be shut to control the spread of the virus amongst the huge number of workers employed in their big factories. Also big businesses need to cover long distances for transportation of goods from their factories to distribution centers and from there to retail stores. This distribution process also needs travelling of workers to different parts of the country which again creates more chances of spreading of virus to different parts of the country. These issues have been the main concerns of big businesses even post partial lifting of lockdown.
Effects on small local businesses
The effect of lockdown has been more profound on small local businesses both essential as well as non essential businesses. The essential businesses were kept open even during complete lockdown at least for a few hours daily to meet the daily needs of people. Because of the restrictions, though business has been affected they have been able to at least survive the effect of lockdown to a certain extent. But with non essentials shutting down completely during total lockdown, a lot of these businesses run the risk of permanent shut down. Small businesses need some business regularly for running their businesses. That is how they can take care of their needs as well as invest in their businesses. Also with most having to pay loans they would have taken for commencing business without income during shutdown it has been very difficult to pay loans. Thus small local businesses run the risk of permanent closure.
But in terms of spread of the virus, local businesses have been better. With products being distributed locally by local businesses, there is less danger of the spread of virus to different parts of the country.
Shift in businesses post covid
With covid spread there will be a definite shift in business trends post covid. Just like liberalisation brought in a huge shift not only in the ways of doing business, the effect of covid will bring the same kind of shift in society. With lockdowns having so much effect on our lives, districts that have been relying on local production and have been self-sufficient have been able to handle the effect of shutdowns and the virus spread better. So much so, there is a talk everywhere on relying on local businesses more than big national and international brands. This shift in thinking will help the local businesses and in turn the local economy immensely.
In conclusion
We can take this forward and build a better India where each and every district is self sufficient. And make the vision of Mahatma Gandhi come true. He had always envisioned a self sufficient India right down to the Panchayat levels. We need to build our country such that each and every district is self sufficient for their needs which in turn will make our country attain self sufficiency. In the long run this will have a positive impact on all our lives and help the local communities immensely.