We’ve all heard the importance of spending money locally in small businesses, but how much of an impact does it really have on a local economy? Ever heard of the multiplier effect? The local multiplier occurs when you spend your dollars at a locally owned and independent business instead of a chain store or online giant. Your dollars circulate through your local economy two to four times more than money spent at a non-local company.
As your dollars move through your community, the money generates more local wealth, charitable contributions, and jobs. Say you spend your money at a local pharmacy. They pay their employees with your money, then those people spend money at a supermarket or other local stores, they pay their employees, and the money continue to circulate. Out of a t$1,000, the first round leaves $600 locally, in round two, $360, so out of the first $1,000, $960 has been spent locally, if this continues six times, over $1,400 has been spent locally, out of that original $1,000, thus the local multiplier. Spend non local, and that six round number drops to only $400 after six rounds.
So, this season, and every season, spend locally and keep your money in your hometown. All small businesses appreciates it greatly and depend on it!
