Independent Businesses Recirculate More Revenue in Dane County

Indie Impact Study Series by Civic Economics provides a comprehensive analysis of the economic impact of independent, locally owned businesses compared to their chain competitors. The latest addition to the series focuses on Dane County and presents compelling findings.

The methodology involves independent businesses opening their books to demonstrate the proportion of revenue expended in five categories: profits paid out to local owners, wages paid to local workers, procurement of goods and services for internal use, procurement of local goods for resale, and charitable giving within the community. For chain competitors, the aggregate value of these is estimated from public records. The difference between these two totals captures the enhanced impact of one or the other category of business.

In Dane County, the study found retail businesses return a total of 47.4% and restaurants a total of 60.7% of all revenue to the local economy through the five categories. For comparison, Civic Economics analyzed annual reports for four major national retail chain stores and found they recirculate an average of only 13.6% of all revenue within the local markets that host their stores. Similarly, the study found national restaurant chains return an average of only 30.4% of all revenue to the local economy.

These findings highlight the crucial role independent, locally owned businesses play in supporting the local economy. They recirculate a much higher percentage of revenue within the community, thereby creating jobs, supporting local suppliers, and contributing to local charities. In contrast, chain competitors tend to extract profits from the community and direct them to distant shareholders or executives.

The Indie Impact Study Series provides valuable insights for policymakers, business owners, and consumers. It underscores the importance of supporting independent, locally owned businesses as a means of fostering economic growth and community development. By choosing to shop and dine locally, consumers can help sustain the vibrant local economy that keeps their unique community thriving.

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