Residents of Portland are used to seeing the little blue “Buy Local” stickers in store windows and on automobile bumpers. The stickers are from Portland Buy Local, a group whose mission is “to support locally owned, independent businesses in Portland, to maintain (Portland’s) unique community character, provide continuing opportunities for entrepreneurs, build community economic strength and prevent the displacement of community-based businesses by national and global chains.”

Nov. 26 is Shop Small Saturday all across our great country. It’s a day set aside for holiday shopping at independently owned businesses and an opportunity to get out with friends and family to shop, dine and meet the small-business owners who make our city the unique place it is.

Why should purchasing from local vendors matter to the citizens of the Portland area? Shopping at small, independently owned businesses brings our community together and keeps more money in our local Maine economy.

A 2011 study conducted by the Maine Center for Economic Policy and funded by Portland Buy Local concluded that each $100 spent at a locally owned business generates $58 in “additional economic impact,” compared to $33 in additional economic impact on the local economy when purchasing from a national chain – a difference of 76 percent.

My partner and I operate a local payroll and accounting firm in downtown Portland named Local Economy. It’s not a retail operation, like those where you’ll be shopping on Small Business Saturday, but after reading the Maine Center for Economic Policy study, I was interested in seeing how much of each dollar spent at our business stays in the Maine economy.

My goal is to share with you where your money goes after you spend it at our company, and then attempt to explain how that might compare when the same transactions are made with companies that have a local office in Maine, but have corporate headquarters out of state, or when money is spent online with companies that don’t have any physical presence in Maine.

My study concluded that 69 cents of every dollar spent at our business stays in Maine:

 27 cents of every dollar was paid as net salaries to employees. That is actual take-home pay that goes into employees’ bank accounts after withholding federal and state taxes.

 14 cents of each dollar was net profit that went to the local Maine owners of our company.

 8 cents was paid to Community Health Options, a health insurance company headquartered in Lewiston.

• 6 cents went to our local Portland landlord for rent.

 6 cents was paid to the state of Maine in the form of state income tax withholdings, state unemployment insurance, state payroll processing bond insurance and state business licenses.

The remaining 8 cents that was put back into the local Maine economy went to independent vendors for office supplies, a locally owned moving company (we moved our office last year), our local computer repair guru, our local electrician (who’s helped with wiring our new office), a local security monitoring company, a local paper shredding company, a local attorney, local restaurants and our local bank in the form of interest and bank fees, plus a few others.

Compare this with buying from a retailer that has a local office in Maine but maintains its corporate headquarters outside the state. Yes, the local office provides jobs for Mainers and possibly rental income to local landlords, but some portion of the dollars you spend with those companies pays for the salaries of out-of-state executives and corporate staff.

Those out-of-state workers aren’t paying Maine state income tax, and goods purchased by the corporate office aren’t charged Maine sales tax. It’s a good bet that their budget for office supplies, legal advice, security systems and entertainment isn’t spent in Maine, either.

Now consider how much of your money will stay in Maine when you purchase from an online retailer that doesn’t have an office in Maine. The answer is: pretty much zero!

The point is to keep local businesses in mind, especially at this time of year. I encourage you to shop locally this holiday season. Independently owned businesses are a vital component of what makes Maine and the Portland area such an amazing place to live.

We understand that what benefits us benefits you – and, just as importantly, what benefits you benefits us. All of us, the independent business owners and our customers, are what make our community unique and give Maine such an incredible sense of place.

 


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