Business Law (19)
Customer Service (12)
Family Business (4)
Human Resources (27)
A small business blog featuring tips to help entrepreneurs succeed in the small business world. Topics include family business, human resources, marketing, money, networking, operations, ownership, startup, taxes and technology.
Local Currency Helps Small Business
It’s not news that big-box businesses are popping up everywhere and harming the local small business economy wherever they land. In fact, a study in Maine by the Institute for Local Self-Reliance (ILSR) showed that only about 14 cents on the dollar of funds that went into a big-box business stayed in the state. This compared to a whopping 54 cents on the dollar for locally-owned businesses.
In an effort to discover ways to bring more customers to the small business community, the community of Barrington, Massachusetts has created a local currency called BerkShares. One BerkShare note is worth 90 cents in U.S. currency. Four banks int he Barrington area participating, along with some 280 locally-owned businesses who have registered with the program, and 250 more in the area that take the currency but aren’t officially registered. As part of their participation, businesses offer customers who use BerkShares a 10% discount on their purchases.
Camera shop owner Steve Carlotta says that the BerkShares currency saved his business stating, “Most of the other camera shops have already packed up and left town. I’ve picked up a lot of new customers; it’s just good business.”
Barrington is not the first community to come up with such an idea. Ithaca, New York started using Ithaca Hours back in 1991 and now has more than 900 participating local businesses. Though many communities that have attempted the same thing before don’t make it very far, for lack of participation and leadership, BerkShares has sprouted a new interest in the concept.
Susan Witt, executive director of the non-profit society that created BerkShares says that, “one of the important roles that a community currency plays is as an educational tool that reminds people about their local businesses, local economy, and develops a sense of pride in the region and those businesses.”
And it takes quite a bit of work to have a local currency. There are strict guidelines put in place by the U.S. government, such as no coins and any paper currency must not resemble Federal currency in any way. There are hang-ups for the local businesses that use the currency, such as increased difficulty in reporting state sales tax and a need to keep the currencies separate with two cash registers. But to most it is well worth it for a result in increased business and awareness of how important their small businesses are to the local economy.
• BusinessWeek.com: Buy Local – With Town Currency
Related Small Business Buzz Posts:
The Cheapest Gas Prices in the Nation
Ideas to Generate Business on Valentine’s Day
Expanding Your Business Overseas: Money and Taxes
Small Business Loans & Grants
Ways to Promote Yourself