Local Businesses Aren’t Actually Businesses

At Locate Local, we spend our days talking to people who own local businesses and the people who support them. From funny to touching to heartbreaking, we hear so many different stories it’s hard to count. Reflecting on these stories, something dawned on me. Local businesses aren’t businesses. You heard me. They aren’t businesses. To be more specific, what I mean is that they don’t act like businesses. They act more like people.

A strange thing happens when an entrepreneur starts a fledgling business. The business ends up becoming an extension of the person or people behind it. If you’re a small business owner or know one, you’ll know what I mean. Small business owners spend an enormous amount of time and effort on every detail of their work. The business becomes part of the identity of the owner. It’s more than what they do. It’s part of who they are.

Big business in the food, beauty, and clothing industries

The “illusion of choice” has become an unavoidable reality for the modern shopper. [Business Insider]

The Illusion of Choice

The theory of a business (if there is such a thing) is based on mathematics and economic principles. Businesses make decisions predicated on financial measures such as revenues, expenses, margins, demands, and supplies. Since there is so much focus on profit, there is no room for kindness, generosity, or decency. Businesses are legal entities that are incapable of human things such as “feelings”. Take the impact of COVID-19. Big businesses were cutting staff and making profits. In contrast, over 200k small businesses across Canada were struggling to keep their doors open and keeping their people employed.

In big businesses, math very much rules the day. Sure, big businesses want you to think they care. But let’s be honest – you don’t think your bank has been wondering how you’ve coped over the past 12 months, do you? Big businesses own and control a great share of many industries around the world. There is no way that they could actually care about each customer they serve. For instance, did you know that only ten companies control the food industry in the world? You read that right, only ten – you can count them all on your fingers. That’s not just in Canada, but the entire world. There are over 7.7 billion people in this world, but only ten companies control the food industry. Do you think that those ten companies actually care about how your day is going?

The scale of control these big businesses have is quite overwhelming. These select few companies own many brands under their umbrellas. More often than not, these brands have nothing in common. This creates an “illusion of choice” for consumers like you and me. You already know that only ten companies control the food industry, but did you know that the beauty industry is also controlled by only seven companies? Take this, for instance, you ran out of cleanser so you stop by a supermarket to grab a new one. There are many options, but you go for the brand that sells “natural” and “clean” products. You believe that brand is, in a sense, “better” than the other brands. Oftentimes, the brand that sells natural products has the same owner as the brand that sells non-natural products. The same seven companies own all these brands at big-box supermarkets.

“We need a Corporate Social Responsibility report”

In the past, the main goal of a business was to provide goods and/or services to maximize profit. However, as society progresses, consumers become aware of the companies that they support. One trend in big business is Corporate Social Responsibility (CSR) policies. CSR started due to the rise of the values-based consumer and societal pressure. People want to support and buy from companies that have values that align with theirs.

Big companies realized this shift. Their customers can see that their underlying truth is ugly, cold, and sometimes cruel. This led to companies becoming more “transparent” about their business practices. In reality, do these companies care about these values or are they participating in CSR to look more appealing to their consumer base? “Quick, someone draft a Corporate Social Responsibility policy for our website.” Next up, “We should create an ‘Our Values’ Department, but not try hard enough to get a third-party certification because that’s too much work and will cost the company extra.”. It’s easier and cheaper for companies to make a CSR report to maintain their conscientious customers, rather than trying to get new customers, and 82% of companies agree on this fact.

See people, not just a business

Oops, I’ve gone off track. This blog isn’t about my cynical view of big businesses. It’s about my admiration for small businesses. I started by saying that local businesses act more like people. Let’s pick it up from there. Unlike big businesses mentioned above, small businesses act in a reverse fashion. Small businesses put values first and trust their customers will appreciate it. Their social responsibility is natural. It isn’t there only to appeal to customers, but also to be true to themselves. With the rise of social media, it isn’t possible to simply provide a product or service and expect customers to keep coming back. Small businesses must create a “human” connection with their customers.

If you’ve done any reading on how to start a business, you will have come across the suggestion to write down the business’s values. This is an important exercise, but I’ve noticed a recurring theme.  When small business owners do this, they write down their own personal values. They can’t help themselves. Their business is them and they are their business. When local businesses donate their time or money to local charities – they don’t do so as a business – but as individuals.

Will you do me a favour, please? See local businesses for what they are – people. If they have taken the time to author a CSR policy, they needn’t have done it. They are decent and authentic people who care about you and your community. That’s their brand and big business can’t strip them of it.