Doing Business with
Small and Local Business
By Joanna Liukkonen
As a small firm working with local companies and start-ups, you’ve probably heard me talk about the personal attention we’re able to give to clients by “staying in our  own backyard.” We thought it would be interesting to step back a moment and look at why working with small and local business is important.
Now I’m not knocking big business and the convenience and consistency that a national and global reach offers for many products and services. But when you stop and consciously think about who you choose to do business with and why, your choices can have a wide-reaching and lasting effect on the economy and your local communities.
It is often said that small business is the backbone of our economy. According to the Small Business Administration, small businesses employ half of all private sector employees and pay 45% of the total US private payroll. Over the last 20 years, small businesses have generated tens of millions of new jobs, yet quite shockingly, over the same time period, Fortune 500 companies have created zero net new jobs.
What Happens Here, Stays Here
When you choose to do business with a small local business, it isn’t just good for the economy; it’s good for the local economy. When we talk of “buying local,” images of fresh, sustainable produce at the farmers market, grown by friendly people down the street may come to mind. The reality is, whether you’re talking about produce, screwdrivers, banking services or legal expertise, it still has the same effect—money spent in your community stays in the community.
For every $100 spent at a chain store, only $12 goes back to the local economy. When that same $100 is invested in goods and services at a local business, it creates $45 that is re-circulated into the local economy.
Yet the benefits aren’t merely economic. Doing business locally reduces transportation costs and environmental impact. You’re working with a vendor that understands the local market. And most importantly, you get the benefit of establishing face-to-face relationships with the companies in your community. The kind of personal service you receive from a local business is priceless—especially in an era of faceless, automated customer service.
Less Really is More for Employee and Employer
Whether by choice or involuntary layoff, a growing number of experienced workers have made the move from larger companies to smaller firms. While they may not offer the prestige of a Fortune 500, there are benefits to working within a smaller company. Employees have the opportunity to work closely with upper management, take on more responsibility and have a greater impact on a company’s success. For many, the change offers a rewarding experience. And for those smaller companies, they get to hire the crème of an eager and talented workforce.
In the small company, hiring choices are made very carefully, considering their long-term employees as part of their own work “family.” Companies with a long history, those that count their longevity in generations, not decades, have weathered every kind of economic storm and are not given to snap decisions. Many look to build long-term relationships with employees, who in turn will build long-term relationships with customers, ensuring a higher caliber of service. And the truth is that many patrons become loyal for generations as well and willingly invest more for that kind of white-glove treatment.
Unlimited Opportunity:
How Credit Unions Can Change the Way We “Bank”
By Christine Walsh Rogers, Guest Columnist
Credit Unions have a pretty unique opportunity in the banking sector and are poised to take full advantage of new and pending regulations, a changing economy and the general public distaste for large banks. Credit unions, like banks, can be state or federally chartered institutions.
Many Northwest credit unions have a long history in serving their communities. You’ve probably heard of BECU, but there many others—76-year-old TAPCO Credit Union in Tacoma, founded by nine city workers, with a board that still includes police and fire personnel; 78-year-old OnPoint Credit Union in Portland, one of the largest in the country, despite serving only 13 Northwest counties; and 73-year-old Red Canoe Credit Union in Longview, recipient of the Credit Union National Association’s Operations, Sales and Service Council’s Best Practices Award.
Ideal for Small Business Banking
Today’s credit union offers all the services you expect from a bank—ATMs and debit cards to mortgages and investment services. Now they can offer businesses the opportunity to join and take advantage of the benefits of membership in a not-for-profit organization that exists for the sole purpose of meeting the financial needs of their members. Credit unions have begun to offer an array of business services specifically designed for the budgets of small- to medium-sized businesses. If their recent growth is an indicator, more and more businesses are seeing the value in moving their primary banking to a credit union. Nationally, credit unions with assets greater than $2 billion represented only 2% of the large financial institution sector, yet they captured 45% of the new business customers in the 3rd quarter of 2010.
Membership with a state chartered credit union is really a partnership with another local business, supporting local jobs and the local economy! Let’s take a look at how a business relationship with local credit unions can benefit your business:
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Credit unions exist solely for the benefit of providing financial services to members. Profits are returned to the membership by investments in products, services, technology and highly competitive rates and fees.
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Credit unions are part of the community. Many support other community non-profits and services, helping the local economy thrive.
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Co-operative partnerships for clients, customers and employees include discounts at other member businesses, and opportunities to offer member discounts and specials for your business, driving more customer traffic!
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Personalized, customized service is the norm, not the exception. The member is the most important stakeholder, since there are no investors or paid board members.
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You are a MEMBER, not an account holder, creating a place for your business to “belong.”
The Future of Community Banking
After 25 years in banking, I see the future of community “banking” in credit unions and am excited to be working to help local credit unions build the products and services their members want and need. The regional economy continues to see budget gaps and areas of weakness, and I see the revival of the state banking sector as an important component of restoring financial health across the state, benefiting small businesses and individuals through increased lending, higher rates on savings and lower costs for services. Credit unions, along with regional community banks, are at the forefront of the grassroots movement to re-invent the way we see banking.
Not every credit union offers a full range of business services, but because of their co-operative nature, they will know who in the area can best meet your needs. Please visit a local credit union in your area to see how they can help you and your business and to learn more about why you belong at a credit union.
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