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To Maryann Ferenc, co-owner of Mise en Place restaurant in Tampa, value will always be important for consumers.
But where they find it, and how they define it, is changing.
“People are desperately looking for value, but at the same time, people are evaluating the word value,” Ferenc says. “What's the real value? Relationships with the community. I believe I see a move, very local or very global.
Those in between will have difficulty thriving.”
That trend has been on her mind a while. To help the local businesses in Tampa, in 2001 Ferenc and Carla Jimenez, owner of Inkwood Books in Tampa, founded the Tampa Independent Business Alliance, which is allied with its national counterpart, the American Independent Business Alliance.
Jimenez flew out to Austin, Texas to meet with other independent business owners and learned how to set up an alliance chapter. There are now more than 35 AMIBA affiliates in 24 states.
“It was a way to share best practices,” Ferenc says. “All of us we're doing better as a result. We did some research. We did some marketing efforts. We like to take advantage of what the national organization knows.”
For independent businesses, the threat of large national chains is obvious. Less market share. Lower profit margins. A loss of employees. Possibly even losing their business. Wal-mart is the archetype of this threat, but there are many that put pressure on smaller retailers.
But the threat is more far-reaching, they say. The trend of increasing absentee-owned chains — with formulas dictating everything from the look of the building to who does the printing to where the money gets deposited — has consequences. It's not just local businesses who suffer, communities may lose social, cultural and economic strength, a place for entrepreneurship, and the ability to choose their own futures.
Locally owned independents circulate the money locally, for local goods and services from banking and health care to printing and cabinet-making, while taxes support local schools, parks, law enforcement and more, Ferenc says.
But customers have a choice. And sometimes it comes down to saving money and having a large selection, versus knowing the people at the store, trusting the quality of what they are selling and being treated like a neighbor.
Goal one: Awareness
The first thing the 160-member Alliance does, after meeting with each other, is meeting with the community. It holds monthly mixers and a couple of other large events each year and tells the public what products and services it offers.
In the Tampa Bay area, about two-thirds of the members are storefront businesses. The others offer special products or services.
“We want an awareness for a customer that there is a choice,” Ferenc says. “We don't want people to be unconscious.”
Part of that awareness is education. Customers who spend money in local businesses see their dollars circulate more times in the community compared to large national chains, which transfer the money to their headquarters overnight.
The multiplier effect of taxes collected from such local expenditures bring up to five times the revenue, while up to 80% of money spent in national chains leaves town in the night deposit. On a typical November shopping day, if all taxable purchases in Hillsborough County were made at locally owned independent businesses instead of national chains, it would make a $28 million dollar difference to the local economy, according to the Alliance.
The other advantage of independents is the quality of the experience for customers. Independent businesses and entrepreneurs like to create an individualized, personal experience. They call the customer by name and spend time with them.
“It's a more emotionally satisfying experience,” Ferenc says. “So much of what we do, takes away something from us.”
They also try to put more money in their community, not only in donations, but in jobs and local spending.
In some ways, independent businesses can be more financially flexible than major companies, with large overheads and set profit and sales targets. Some chains have cut back hours, trimmed staffs and limited sampling. Some large chains, such as Circuit City and The Bombay Co., are closing stores and out of business.
“We run smart operations, but we don't want to be millionaires,” Ferenc says. “We like our locations. But it's not all about money. In times like these, it makes us able to hang on. We can cope with much less of a profit margin. Then we can regain it as times change. We can make these choices.”
Opportunities
The softer economy, which has forced many chains to scale back, is an opportunity for local independent businesses to fill in those spaces and get good lease terms, says John Dohring, 35, a commercial real estate broker and the Alliance's incoming president.
Wal-Mart has vacated at least eight locations in New Mexico and has 400 vacant nationwide as it goes to a combined grocery/department store format. It has done this in other states for larger locations. The Wal-Mart on State
Road 54 in Land O' Lakes will close when the new Super Wal-Mart on U.S. 41, a few miles away in Lutz, opens.
“The real estate world has got a lot of vacancies now,” Dohring says. “I'm excited about the opportunities for independent businesses. We need to rally our members and support each other.”
Dohring says independent businesses need to run more efficiently and creatively. Mise en Place added catering to its restaurant business and saw revenues rise. They also need to show outstanding customer service. If a staff member is scheduled to work until 5 p.m., he should stay and help a customer as long as possible. Nordstrom's, a national chain, is famous for this. Some employees have even changed customers' flat tires.
“We need to make up the difference in size with character building,” he says. “We need to care more. Just because our job ends at 5 p.m., we don't get off at 5 and the day is over.”
Even though consumers are pinched financially, there is a growing awareness for green products and services and local ones.
“People know we need to keep the money locally,” Dohring says. “There is absolutely a trend for that.”
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