Want to help save your small town? Start your own business.

You want to make a difference in your town? Start your own business. Any kind of business! Photo by Becky McCray

You want to make a difference in your town? Start your own business. Any kind of business! Photo by Becky McCray


People ask all the time how they can help save their small town. I always say, “start your own business.” Here are four reasons why starting your own business is the best thing you can do to help your small town prosper.

1. When you start a business, you decide what values to put first.

“One of the best things you can do to drive societal change is start a successful business,” entrepreneur Fred Keller of Grand Rapids, Michigan said.

Keller’s business, Cascade Engineering, doesn’t just look for a net profit. It looks at the return on people, the planet, and then profit. It’s the now-famous triple bottom line. The prosperity of his business lets him share the prosperity with his entire community. (More about Fred Keller and his community sharing.)

When you start a business, you get to decide what matters. You don’t leave those decisions up to corporate headquarters far away. Your values are more likely to line up with the local values, the things that matter in your place.

2. More small businesses means more jobs.

Many small town leaders worry about the availability of jobs. They obsess over recruiting that one big employer that would provide dozens or hundreds of jobs. That’s exactly backwards, it turns out. Professors Edward L. Glaeser and William R. Kerr in the Harvard Business Review said that “more small firms means more jobs.” They found that small, entrepreneurial businesses are highly correlated to regional economic growth and faster employment growth. (Read a summary of Glaeser and Kerr’s HBR article.)

If you never start your business, you will never hire anyone else or create any new jobs. The more of you that start businesses, the more jobs you’ll create. And that’s much more likely than succeeding at recruiting some magical employer from far away while competing against every other town in your region.

3. Locally-owned small businesses are the key to local prosperity.

You may be tempted to think that your new business wouldn’t be important enough, that only the few outstanding successes, the super-star businesses matter. That’s wrong. Your business is one contributor to an overall prosperous town. Let’s look at the total return on local small businesses.

Charles Tolbert, Baylor University, did the research and found local small businesses were associated with:

  • higher average income,
  • less income inequality,
  • lower poverty levels,
  • lower unemployment levels,
  • less crime, and
  • better health: lower levels of obesity and diabetes, and lower rates of death.

Large businesses showed no such association. (More on Tolbert’s research.)

When you have lots of little small businesses that are moderately prosperous, they make a big difference to your town.

4. Locally-owned small businesses return more of what they earn into the local economy.

If you start your own business, you will put twice as much of each dollar into your town than what a chain store would. That’s because you buy more of your supplies and services locally, you are more likely to stock local products for sale, and you give more back to your community. And that’s before you turn a profit, because you spend more of your profits in town than any chain that ships all the profits off to company headquarters far away. Add all that up, and it’s twice as much as what chain-owned businesses keep in town.

Yes, this is supported by research, actually by quite a bit of research. The American Independent Business Alliance has ten new studies on the local multiplier effect for you.

So even if your town did recruit some big employer to open a plant or branch in your town, you’d still be better off with a bunch of small local businesses that keep more of the prosperity in your town or region.

Now go out and start a business. It’s your best way to be part of saving your small town.

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About Becky McCray

Becky started Small Biz Survival in 2006 to share rural business and community building stories and ideas with other small town business people. She and her husband own a retail liquor store in Alva, Oklahoma, and a small cattle ranch nearby. Becky is an international speaker on small business.

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  1. Ivan Widjaya says

    I like it that you started it with setting values. I guess this is what most people who want to start businesses miss. They miss to set values and meet the needs. This is more important than making some money.