Only until very recently in the history of human commerce have we become globally integrated; for most of human history, all businesses were local businesses.
Advantages of being local
Such a model has obvious advantages and a disadvantage, being local means you can tailor your response to a customer need much more accurately than a company which considers you a region on the map. At the same time the trust you can develop with your customers cannot be matched by non-local competitors. Every day you are a part of their lives you might even frequent the same pubs or share similar recreational interests. Being local also helps reduce your response time for any urgent or time critical job. Where time is an issue, nothing can match a local business.
Disadvantages of local business
The main disadvantages those businesses face when compared with their non-local competitors is a matter of resources available. Most non local competitors to the businesses are normally larger and have considerably more resources; both in terms of physical plant machinery material but also in terms of human resources. Being larger with a wider area of opportunities and with much more income it means they can defray the costs of operation over a larger number of contracts. Local businesses also lack the same ability to tap the international markets both as a source for sales but also as a source for suppliers. Thus they are not able to take advantage of any cost saving from tapping the international supplier base.
Importance of local business
The importance of having a strong local business cannot be over stated, for it is these small to medium enterprises that are now providing the bulk of new employment opportunities. They are also the ones paying local taxes, and paying local wages. All of which stimulates the local economy and provides in itself more opportunities for growth. If an area’s local businesses go under or close down for whatever reason, the effect is seen very quickly with the rapid development of a post-industrial wasteland. This further pushes away other businesses and thus triggering a vicious cycle to a point where the population starts to move away, thus tearing the heart out of the local community.
Keeping it local
Many local businesses often fail to take advantage of the fact that they are local. Being local means that you are part and parcel of the local scene and you know a lot more about the local economy than any outsider could. Also you can vary your demands for payments to include barter where instead of cash you can offer and accept goods and services for your or others payment. Being part of the local economy of your area can be a great boon for your company if you are willing to think outside the box, take risks and leverage your local knowledge to the advantage of your business.