Keep it Local!

We all know it is important to spend where we ride and to support the local economy. But do all dollars spent have the same impact? In this podcast, we explore that premise with Thomas Barr, the Vice President of Business Development for Local First Arizona. Local First Arizona is a nonprofit working to build equitable systems for Arizona’s local businesses, those businesses that create a vibrant, inclusive, and sustainable Arizona economy. We think this is one of the most important podcasts we have recorded in the last 18 months. Give it a listen!


Kevin: Welcome to the podcast, Thomas.

Thomas: Thank you so much. Happy to be here.

Kevin: So we’re gonna talk about spending where you ride. So as a tourist in a local, town, small town, how can I have the biggest impact with that dollar that spent. So my thought, is if I go into a small town and I’m riding there, let’s say Ajo, Arizona, and I fill up my car at the local gas station, or I go to a local restaurant, those two dollars seem to have a different impact to me.

Can you explain how they have a different impact?

Thomas: Yeah, so one of the things that we like to think about is when you’re spending money with a local business what is that business doing with that money or potentially doing with that money after you spend it with that company? And so, to your example, a gas station you know, that business is kind of structured to pull people in rather than making profits directly off the gasoline.

Right. So the gas station mostly makes its profits. Being in places where people are needing gas and then selling things within the store that actually drive profits for the business. And so is that business. You know, a, a fully independently run, operated company that are, are selling goods that they are sourcing.

From that community, right? Are they, are they sourcing products that are also made in that small town? Are they selling items that are crafted from artists or individuals that are within that town that would drive more revenue for that area? Or are they not right? and I think we, we could all, all mostly understand that those types of scenarios usually don’t yield a high.

For small town, right? A lot of, a lot of those types of businesses are nationally ran or, or nationally franchised or, or what have you. Now, if you consider the impact of, if you were to go into a local, boutique, or local restaurant or really anything that is apparently or obviously independently run within that.

You’re almost certain that the person running that business lives there, first of all. Right? You’re almost certain that a lot of the products, whether that’s food, whether that’s the, the hot sauce they’re using, that they’re serving on their tables, or the different products that they’re selling on their shelves are also potentially sourced from around the.

So what’s happening is, although you may go in and only spend 15 or $20, let’s say in in that restaurant for your meal, that business is turning around and supporting other entrepreneurs and small businesses. With the, with the profits that they make. Additionally, there’s lots of businesses that we never think about or hear about really, or, or see upfront that are supported through that business.

These are payroll companies that are helping that business you know, fund the employees at the company. These are maybe a local print. That doesn’t have a brick and mortar that you can walk into, but is printing all of the menus, all of the signage, all of the, all of the flyers that that business needs to exist in the town.

It may even be a local web developer. That keeps up the maintenance of that business’s website so that you know when their hours are open and make sure that when you’re Googling through that town, great restaurants that they come up on Google, right? They’re looking for ways to market and advertise that company.

So it’s important to remember that when you’re supporting a single local business, that’s not the only business you’re supporting those dollars recirculate and have a ripple effect through that community. . I always like to encourage people to do a little research ahead of time. Right. Obviously, you know, you’re probably gonna be eating some food.

You’re, you’re probably gonna be maybe picking up a souvenir, but what other things might you be able to do to support that community? If you are biking or you are an active person are there tubes that you can buy from the local bike? Um, Is there some type of maintenance that you’d want to do to your bike while you’re grabbing a bike to eat right, to, to drive some revenue, to drive some activity to that small town.

So by looking ahead and thinking a little bit about the, the ripple effect of that impact um, it has, it has a greater lasting economic impact on that town and, and the individuals that live in that community.

Kevin: Okay, so I heard you say a couple things that caught my attention is we’re looking for a place that’s locally owned, uses local employees and sources product locally, and if we get that, we actually get a leveraged ripple effect in that economy. Do I have that right?

Thomas: Absolutely.

How to identify a locally owned business?

Kevin: Okay, so How do I know a business is locally owned?

Because you can take brew pubs, for instance, and it, it’ll ha have a really cool sounding name as a brew pub, but on the back end it actually might be owned by Anheuser-Busch. So how do I know if I’m actually walking into a local.

Thomas: great question. And it’s actually something not a lot of people think about which you’d be surprised to learn. You know, most of the time as we spend our money we’re just going around just looking for the products that we need or the experience that we want, rather than thinking about who owns the business that we’re supporting.

Right. And. The, a couple of answers I’d like to give you. One is we like to encourage people to just ask. If you walk into a place and you ask the staff, Hey, who owns this place? Or, Hey, who’s the owner? And they don’t know , more likely than not that is not a local business. But if you walk into a shop and you say, Hey, I was wondering who owns this place?

And they say, oh, that’s Matt. He’s in the back. um, Almost a hundred percent chance that that’s a locally on place, right? So sometimes it’s just about engaging with the staff. It’s engaging with the business and getting to know them because local businesses are built on relationships. They want to get to know their customers, and sometimes we just fail to ask and find out a little bit about the business. Um, That we’re supporting. .


Kevin: I’m gonna throw out some statistics. I just wanna get your comments on these pieces

I got a statistic that says, small businesses generate $68 of local economic return for every $100 spent with them. Does that sound true or any thoughts on

Thomas: that?

Yeah. So there’s a few different studies based on different industries and different types of businesses that shows that when you support a locally owned business Um, economically speaking, more dollars stay and recirculate in that community. And so that’s really important to look at and understand because we’re not just talking about people feeling good, right?

it feels good to support a local business. You love the experience. Maybe you get to know that owner when you pop into that restaurant and, and get to know their name. But that’s not all we’re talking about. It actually makes more economic sense for us to drive our dollars to more, more locally owned business.

because more dollars are staying in the community. That is from that business putting their dollars toward more businesses around them. If we go and we spend our money, let’s say, at a national chain that’s headquartered in another state, the accounting firm, the graphic designers, the web developers, all of these secondary jobs are being extracted from that community.

and the money’s being put somewhere else far away. And so less jobs are sustained, less tax revenue is staying in that community. And we think about that from a, you know, just a community impact perspective. Those tax dollars go to support the infrastructure of our roads, our libraries, our fire departments, our parks, all these things that make communities a great place.

So you, you can look, throughout all these different studies, but one or another, they all show that it makes economic sense. To put your money towards more locally owned businesses.

Kevin: Businesses with fewer than 500 employees account for 99.7% of all employers, which is really out astounding to me. But the next part that really caught my attention was, small businesses donate 250% more than large businesses to the community causes. That, that, that was just like, that was huge. 250% more from local businesses contributing back to local causes than the big box chains.

This one I need your input on. So with the big box chains, we know we have more shipping costs involved cuz we’re not sourcing locally. And what caught my attention was here is that shipping cost is adding to, CO2 in the atmosphere and climate change.

Do you have any stats on that or any thoughts on that?

Thomas: Absolutely. And you know, we can look at this not only from a consumer perspective, but also from a. Mass supply chain perspective when looking at the food industry. We actually know that 75% of the tomatoes consumed and eaten in Arizona come from somewhere else. And 75% of the tomatoes that we grow in Arizona go somewhere else.

And so our supply chain is really not functioning in a way that thinks about External climate impact from a broad perspective, because I mean, not only the packaging, but the, the delivery, the fossil fuel, like all these things that go into that supply chain existing is to get food in, in really far away places rather than thinking about localizing that supply chain.

So just in food in particular, we could look at those costs and say it actually makes a more sustainable and. Strategy to source things that are close to us, right, than to seek something that might be coming from the other side of the world across the country. You know, whatever that looks like. And it’s not to say that we don’t need those things sometimes, right?

It, it, our world has moved to a way where sometimes you can’t get something that’s local to you. And that’s not what we’re saying. We are. Can you choose the local option first? That’s why we’re called local First Arizona and not local, always Arizona, right? You can try first. You can do a little research.

You can see what type of impact you can have as an individual before trying to just do what’s easiest all the time.

Kevin: And I think we all like to have a sense of community and it’s really fun to walk in and go to that coffee shop and talk to that owner and feel like you have that relationship or that bike shop or even that restaurant. And I’ve got a statistic here that says, Basically, we really trust as consumers, local shops much more than we trust big box chains.

Thomas: Yeah. You know, and kind of back to your charitable aspect stat. If you walk into a local bagel shop, let’s say you look behind the counter and what are you gonna see more times than not. You’re gonna see some photos of some T-ball teams, softball teams, soccer team, right? The local troops. That business is a closely tied individual to that community, and so they’re always the first ones to show up to donate to the, to the sports programs.

They’re always the first ones to, you know, Allow kids to do fundraisers right outside their business, and they’re always the ones showing up to community meetings because they care about the makeup of their neighborhoods. And so that connection, that that placemaking aspect is really critical. And um, that is all, that all plays into how we spend our money, right?

If we’re not supporting that business when we, when we can and we’re able and they go out of business, then there are less businesses being supported from that and there’s less community being driven from it.

Kevin: Right, right.

Local First Arizona

Thomas: The other thing that I’d say is that w that’s why our organization, local First Arizona, exists. We want to make it easier. We want to make it fun. We want to make it more inviting for people to find who locally owned businesses are. So what we’ve done is over the past 20 years, we’ve built a coalition of thousands of businesses across Arizona that are certified local, that are, that are proud locally owned businesses in Arizona.

You might see while you’re biking throughout Arizona, if you stop at a local restaurant or a local coffee shop, you’ll see a sticker outside that says, proud locally owned business. That’s what we’ve been working on the last 20 years to get people to recognize, to understand who’s local. And we even built a statewide directory of all of these businesses so you can go to our website, any town, search any type of business, any industry, any region you want, and you can find who the local businesses are in the community that you’re supporting. And so those are a couple of ways that we encourage people to find who’s local.

Kevin: Okay, so one was ask or engage with the employees and ask and ask them, is it local Two is to look for that sticker in Arizona for local first. And the other one I heard was the website. Can you give us the address, the URL for the website for local first Arizona.

Thomas: Yeah, it’s just local first You can click on find and then you can search your directory of thousands of businesses across

Kevin: okay. And. Local first AZ that is a nonprofit. Is that correct?

Thomas: Yeah, we’re a statewide nonprofit. We got our start in 2003 and you know, our mission is really to build a more inclusive, resilient, and sustainable Arizona through empowering locally on businesses and entrepreneurship throughout the state.

Kevin: Can you tell us a little bit about your impact numbers over the years in, in terms of how you guys have measured success?

Thomas: Sure. Absolutely. So if you were to look at Arizona 20 years ago, the landscape was just incredibly different. You know, even in just greater Phoenix, you could have drove around in your vehicle and there were two chain restaurants for every local restaurant. And what we’ve been doing over the last 20 years is advocating.

The importance of locally owned businesses from every perspective, so educating consumers about where they spend and and why it matters. But also businesses too, right? If you’re a locally owned business, you can seek out a local web developer, you can seek out a, a local print shop and support those other businesses in your community.

And then also at a macro level, we’re talking to state governments, municipalities, large businesses, whether they’re local or not, on their procurement spending. How much of it is going to local businesses based in Arizona? How much is not? So over the past 20 years we’ve been, we’ve been having those conversations and influencing more and more purchasing, going to locally on businesses.

you look around today just in greater Phoenix, you’re gonna see two local restaurants for every one chain. And so we’ve completely flipped the dynamics of the infrastructure of locally owned businesses from a, from a food and beverage perspective, right? You, you want to find the great restaurants, right?

You, you tend to not want to come to a new town and want to go to the chain restaurants cuz that’s not really a great experience. So we’ve really been able to drive. The attention that people have of seeking out locally owned shops and visiting them more frequently. Beyond that, we’ve been able to influence um, thousands and really millions of dollars being directed to more locally owned businesses, both from the consumer perspective, the business perspective, and, and the macro impact.

And so we’ve been able to forge partnerships. We built our coalition to be the largest in the. So we represent over 3,500 independent locally owned businesses right here in Arizona, and we’re the largest in, in the United States. And we’re driving lasting impact in every corner of the state. So we’re not just doing work in Greater Phoenix.

We represent every county in every rural town in Arizona. We actually merged with the Arizona Rural Development. And provide economic development strategies and tourism support to all of our small rural towns throughout Arizona and drive more people to, to visit those locations and get to know them.

And you know, when you vacation, you don’t just have to go to California, you can visit these great, amazing rural communities that are all throughout our state. So I guess to just touch on this few points of recap on them, we’ve driven more connection to place. Just generally with people wanting to find local businesses and the economic impact has been substantial.

We’ve not only been able to help incubate and start more businesses but we’ve driven more economic activity throughout Arizona through educating people about the importance of, of supporting them.

Kevin: That’s really cool. I mean, I heard 3,500 businesses in there. I heard about the rural development. I heard about the flip from, it used to be only one local restaurant for every two chains is flipped to two local per one chain. That’s great.

Thomas, thank you very much for joining us today. And again, Thomas is from Local First Arizona and is an expert in this field.

Thank you very much.

Thomas: Absolutely. Thanks for your time.

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