Summary

The article emphasizes the importance of supporting local businesses during the Coronavirus crisis to preserve community identity, foster meaningful employment, and ensure economic diversity.

Abstract

The article "5 Reasons to Save our Local Businesses Now" by Levi Borba underscores the vulnerability of small enterprises amidst the Coronavirus pandemic, contrasting their limited access to cash flow and government aid with the advantages enjoyed by larger corporations. It argues that local businesses are the soul of their communities, offering more meaningful work and contributing to the local economy by sourcing supplies locally. The author warns against a future dominated by large chains, citing the importance of local businesses in maintaining diversity and preventing market monopolization. By choosing local restaurants, coffee shops, and hotels, and by writing positive reviews, consumers can actively participate in sustaining these vital community entities.

Opinions

Local businesses are portrayed as the heart of their communities, providing a sense of identity and togetherness that is often absent in large corporations.
The author believes that helping small entrepreneurs is crucial for economic recovery, as their success has a ripple effect on the local economy and supply chain.
There is a concern that government relief funds are disproportionately benefiting large corporations, potentially leading to increased market concentration and reduced quality of services.
The article suggests that work in local businesses can be more fulfilling, as employees can see the direct impact of their contributions.
It is argued that by supporting local businesses, consumers help keep money within their communities, as opposed to contributing to the profits of distant shareholders.
The author advocates for direct support of local businesses, such as ordering from local restaurants, choosing independent hotels, and leaving positive reviews on platforms like Google, Yelp, or Tripadvisor.

5 Reasons to Save our Local Businesses Now

They are the soul of their communities, and work in a local business can be more meaningful than for a large corporation.

I thought a lot before writing this article. After all, I am a travel writer, so it should be out of my scope.

Corporations have the media, politicians, and plenty of government help. For this reason, sometimes we just ignore the role of small entrepreneurs in our society. However, helping this often neglected part of the population will trigger the recovery of everyone else.

We should help them. Not after the Coronavirus epidemic crisis finish or just when things got better, but now. Here I list 5 reasons why.

“In order to progress, modern society should be treating ruined entrepreneurs in the same way we honor dead soldiers, perhaps not with as much honor, but using exactly the same logic . For there is no such thing as a failed soldier, dead or alive — likewise, there is no such thing as a failed entrepreneur”

Nassim Nicholas Taleb, Antifragile: Things That Gain From Disorder

5 reasons to save our local businesses NOW

1 — All sorts of businesses are in trouble. But local, small businesses are the most fragile.

What separates a company from bankruptcy can be resumed in one expression: Cash flow.

If a firm doesn’t have cash flow and the bank account goes dry, they cannot pay the coming obligations, and suppliers can execute them. This process has some variations between countries but the basic steps are similar in the western world.

Why big corporations have a smaller risk during this crisis?

Even though their cash flow also drops during a crisis, huge companies have plenty of bank credit lines available. So when things go bad, it is easy for them to access money and keep running their operations.

Small companies don’t have such easy access to credit, or if they have, it is just too expensive.

There are exceptions (small companies with big credit lines), but as a rule of thumb, this difficult access to money makes small business much more fragile

2 — The lion’s share of governmental help will go to massive corporations instead of small entrepreneurs.

Big firms can afford entire teams of lawyers and accountants to prepare the documentation needed to access government relief funds

Meanwhile, in small business, this is often done by the owner or some non-specialized employee. They don’t have the same knowledge (or contacts) of a famous law firm, so they eventually end with the breadcrumbs of those billions that governments are investing to save companies and jobs.

3 — We must avoid a world like the one of the movie Demolition Man

In 1993, Sylvester Stallone and Wesley Snipes starred a classic movie where they confronted each other in a high-tech future. There, the fast-food chain Taco Bell took over all other restaurants. As the female character — starred by Sandra Bullock — explains in a classic scene, now all restaurants are Taco Bell.

https://www.youtube.com/watch?v=AlcDHlK_RoY

Before I wrote about big corporations having easier access to credit and government money to survive during the crisis. Many of those gigantic companies can use governmental money (which is your money) to later take over small businesses without the same privilege. A similar thing already happened in 2008. Bigger market concentration, less quality of services for you.

4 — More meaningful jobs

I write this item as someone that worked both in multinational corporations and in local businesses.

When you work in a smaller firm, the effects of your efforts are way more visible. You see it advancing, people around talk to you about it and ask questions that you know how to answer.

The same cannot be said in most corporations. Place where you get enclosed in a cubicle doing very specialized tasks, with an undistinguished effect in the final product.

It is easier to be proud of your work when seeing your contributions make the difference. You feel more than another gear in a giant machine.

5 — Local Business more often procure their supplies in the local community

Let´s think about restaurants and food-chains.

McDonald’s, Burger King, and alike buy what they need using large and long-term contracts, generally made with other colossal corporations. An example is when they buy meat from food-industry behemoths like Marfrig or JBS.

Meanwhile, the local restaurant will procure fresh vegetables in the nearby market, and buy meat at the local butcher. So if this small restaurant goes bankrupt, soon the butcher, the vegetable stand, or the laundry that washes their table cloths will all be in trouble.

By supporting the local restaurant instead of the chain restaurant, the local hotel instead of the chain hotel, etc. you are, in reality, supporting your entire environment to cross this difficult moment together.

Just like with the supplies, local firms let a good part of their profits in the neighborhood.

When you stay in a chain hotel like Ibis or Marriott, part of what you pay (approx. 4%) is profit for the company itself and it’s shareholders. Part of this profit is remitted to some billionaire in his yacht at Seychelles (or some other paradise island).

When you reserve an independent hotel, the profit goes to a retired couple, so they can buy a new car in the local dealer. Money stays in the neighborhood.

OK, you gave me 5 reasons to save our local businesses now.

Conclusion: How we help local businesses to overcome the Coronavirus Crisis?

Some ideas are:

1 — Order delivery food from your local restaurant.

2 — Instead of Starbucks, go to your local coffee-shop. Here in Warsaw, after discovering a small and charming local cafe called Cafe Charlie, I stopped visiting chains like Costa Cafe. It tastes better, and it feels better.

3 — Book a local hotel or hostel when traveling. More important: Book directly with them instead of using websites like Booking.com. Those sites charge15% commission from the owner and have some very questionable practices against small hotels.

4 — Do good reviews of the local places that you enjoy! In Google, Yelp, or Tripadvisor. That makes their day so much better and helps to overcome all the difficulties.

Author: Levi Borba, founder of Colligere Expat Consultancy, former RM specialist for the world´s greatest airline, writer of the books Moving Out, Living Abroad and Keeping Your Sanity and Budget Travelers, Digital Nomads & Expats: The Ultimate Guide. You can check some of his articles here.

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