By Stephen Fournier, President, Central New York Market, KeyBank
May is National Small Business month, a time to recognize small businesses, their impact on American culture and economy and honor the amazing people who run them.
In today’s economy, consumers care about how businesses operate and what they stand for. In fact, according to a global sustainability report by Nielsen, customers are 43 percent more likely to purchase a product from a company they know is committed to social value.
In recent years, small, local businesses have been ahead of the curve when it comes to social value. Thinking beyond the bottom line has been a differentiator and competitive advantage.
However, businesses of all sizes have taken notice and have gotten behind this trend. For example, major financial service industry leaders like KeyBank’s Beth Mooney and BlackRock’s Larry Fink are challenging fellow business owners and executives to rethink their economic impact, environmental footprint and social conscience.
In practice, the number of companies directing corporate citizenship from the senior executive level has increased nearly 75 percent compared to five years ago. At KeyBank, corporate social responsibility (CSR) initiatives that positively affect economic impact, environmental footprint and social awareness are woven into the fabric of who we are and in whom we invest. An example of this is KeyBank’s $2.5 billion commitment to invest in small business/farm lending through 2022.
Even with large corporations beginning to grow a social conscience, local small businesses remain at the heart of this movement.
Not only do small businesses have a positive impact on society based on their unique understanding of the local and regional communities they serve, but locally owned businesses typically have people who are deeply ingrained in the community and have genuine care for it. They truly are neighbors. They represent the broader population. They want to see their town’s Main Street booming and watch other businesses thrive. They want to know they’re adding value to the community at large in any way possible. And they recognize that their ability to flourish is interwoven with the overall health of the communities in which they operate.
This is as true in Central New York as it is anywhere else. For local business owners and leaders, embracing this model can create opportunity and drive growth. For those who need convincing that this new approach to conducting business is worthwhile, consider the following three benefits: community vitality, customer loyalty and employee recruitment and retention.
Community Vitality
It may seem like common sense, but it bears repeating: small businesses are key to communities. When these businesses thrive, communities thrive. Not only are they essential to the community, the community embraces the initiatives set forth by business owners and leaders, like community fundraisers and profit proceeds for disaster-relief, education, youth services or medical aid.
Customer Loyalty
As part of running any business, customer loyalty is a must. Simply, businesses need customers to help sustain a healthy bottom line. However, in today’s world where consumers prioritize social awareness from the businesses they support, it is essential business owners market and express the initiatives they are most passionate about with customers. Interestingly, Double the Donation reports 55 percent of consumers say they are willing to pay more for products from socially responsible companies. And it’s not just in driving revenue, it is about building relationships and crafting the makings for customer loyalty.
Employee Recruitment & Retention
Not only do socially responsible business practices benefit the bottom line in terms of customer loyalty and added product value, it can aid employee recruitment and potentially reduce turnover. As the Millennial generation has shown, they are committed to doing good and supporting companies that do the same. In fact, 79 percent of millennials said they consider corporate responsibility when deciding where to work, and 74 percent say their job is more fulfilling when they are provided opportunities to make a positive impact at work. In times when turnover is high or during the holiday season when employee demand rises, remember: employees care and want their employer to care as well.
The question remains: how can businesses prove to employees they are socially responsible and authentically showcase philanthropic efforts?
For-profit organizations can consider registering as a B Corp. This registration will demonstrate to potential (and current) employees how the business is legally recognized as an organization with a duty to serve their community. B Corp classification can validate a business’s sustainable practices within the market.
While the added economic value of corporate social responsibility is evident, it’s also important to remember people care and businesses should, too. May is Small Business Month. Think of how your business can improve its social conscience. Not just as a feel good or nice to do, but as a business imperative that is core to your success. If and/or when you do, your business, employees and community will thank you.
About the author: Stephen Fournier is president of KeyBank’s Central New York Market. He may be reached at either 315-470-5096 or [email protected].
Benefits of shopping locally
One of the most persuasive benefits of shopping locally is the economic boost communities get from locally owned independent businesses. In fact, Forbes recently looked at why shopping at small businesses is important. Here’s a sample of what they found and why you should support your locally owned businesses this Small Business Month…and beyond.
Job creation
- Local businesses employ about 77 million Americans. When we shop locally, more of our money stays local, so it has a direct positive impact on creating more jobs for people in the neighborhoods in which we live.
- Local business owners tend to hire people who represent the demographics of the surrounding community, including historically underserved populations. Considering that 40 percent of small businesses are in low-income communities, local job creation can be a great driver of community revitalization.
Diversification
- Local businesses add to the diversity of products and services available to a community. Whereas chain stores often stock shelves that reflect national demands, a local sporting goods store is more likely to focus on community interests, from niche gear to offering apparel in local school colors.
- Vibrant local business communities also make neighborhoods more interesting. This tends to attract new residents and encourages growth.
Network development
- Shopping at small businesses provides access to local expertise. For example, a local garden shop can tell you which variety of tomato grows best in your climate. You can also get more personalized service by establishing a relationship with the owner, including quicker resolutions to customer service issues.
- Thriving local businesses often hire other small businesses to perform support tasks or provide raw materials and resources. This bolsters networks that can promote further growth and/or generate demand for more services, such as co-working spaces, local deliveries and advocacy groups.
Environmental sustainability
- Consumers who walk to local town centers reduce their use of cars and buses. Similarly, buying from small businesses that source local products can reduce the environmental impact that national chains impose in their transportation of goods.
Real estate growth
- Neighborhoods served by successful small businesses see home values increase 50 percent on average and improve desirability with prospective homebuyers.
- As real estate prices grow, communities can attract new investments to spur continued economic growth. This is especially important in low-income neighborhoods, where small businesses may have a harder time obtaining loans and resources.
- An influx of new residents increases local tax revenue, which boost infrastructure spending for schools, public safety departments, libraries and parks that strengthen communities and drive future growth.
