The results of the 2019 Independent Business Survey from the Institute for Local Self-Reliance.

Learn who they are and what they do.

The Institute for Local Self-Reliance challenges concentrated economic and political power, and instead champions an approach in which ownership is broadly distributed, institutions are humanly scaled, and decision-making is accountable to communities. We believe that economic systems should embody democratic values, and that democracy can thrive only when economic power is widely dispersed. We believe that communities are healthiest when they possess the authority, capacity, and responsibility to chart their own course. We call this vision local self-reliance.

Then read the results of the ILSR's indie business survey.

The results of the 2019 Independent Business Survey from the Institute for Local Self-Reliance demonstrate the strength and resiliency of small, independent businesses. They also speak to the forces independents see as significant threats and roadblocks to their businesses: a playing field made uneven by policies that favor their bigger competitors, highly concentrated markets for key supplies and services, and difficulty securing capital, among other barriers.

As we have documented in previous surveys, independent businesses have proven nimble during a period of dramatic shifts in technology and consumer habits. Much of their resilience can be traced to the distinct benefits they provide to their customers, industries, and communities.

Yet, despite these competitive advantages and their broader importance to the U.S. political economy, independent businesses are under threat and declining in most industries. The findings of our 2019 Independent Business Survey suggest that the problem isn’t changing technology or consumer habits. Instead, independent business owners say they are often competing on a unlevel playing field. Many public policy decisions in recent years have fueled market concentration and favored their big competitors.

This survey’s findings shed light on these challenges and policy issues. In their comments, business owners also offer insight and guidance to elected officials looking to build a more equitable, entrepreneurial, competitive, and dynamic economy.

More than 1,000 independent businesses nationwide participated in this survey. Retailers made up about half of the responses, while the remainder represented a mix of industries, from service providers to manufacturers, banks, wholesalers, and more. In addition to the main questions, business owners provided hundreds of written responses on various topics. We analyzed these for additional insights and quoted a representative sample in this report ...

Economic extraction: Wait, do you mean big box "dark" stores want property tax breaks that aren't available to indie businesses? I'm shocked. SHOCKED.

You know, principles and shit.

I've arranged Stacy Mitchell's tweets in essay format. As Mitchell notes, the discussion goes back several years, and here's one of ours on the topic; it was another fruitless attempt to convince Develop New Albany to lead discussions that actually matter to local independent business owners.

Challenges for independent local businesses include one-way streets and Big Box tax evasion.

It's always worth re-examining the consequences of civic and corporate greed colliding.

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Big-box retailers like Walmart & Target are not economic development. They’re a form of economic extraction. Always have been. Now they’re engaged in a new phase of extraction that’s costing communities even more.

In 21 states, big-box retailers are contesting their property values — claiming their busy buildings are obsolete & thus worth very little. They’re getting their taxes slashed & often winning huge refunds for previous payments.

This tactic is crippling the finances of many local governments, forcing homeowners & small businesses to pay higher tax bills.

In Texas, for example, the state’s comptroller says cities and schools will lose $2.6 billion in revenue per year because of big retailers' “dark store” property tax claims.

(As an aside: this has been strangely slow to get media notice. We wrote the first national story way back in 2015 … Finally @CityLab and the @nytimes have done in-depth pieces recently.) 

I have mixed reactions on who to blame. On the one hand, the mega-retailers are nasty. They came in promising lots of tax revenue to these towns. But their goal has always been to extract as much as possible & leave as little money behind as they could.

On the other hand, many city officials have been so stupid about big-box stores. There was plenty of evidence 10-20 years ago that approving these stores was a bad idea.

Big-box stores drove massive consolidation in the retail sector. About 100k local retailers disappeared in a decade. More jobs were lost than created. Civic and social networks deteriorated as Main Street did.

This was all known at the time. There were published studies on the net job losses, for example. I wrote a book in 2006 called Big-Box Swindle. People like @SprawlBusters went around the country explaining the consequences of saying yes to Walmart’s store proposals.

Some places got it. Vermont said no to big-box retail in a sweeping way. Today VT has more small businesses per capita than any other state. And not a lot of vacant retail.

But most cities and towns, often over the objections of their residents, said yes, yes, yes to the big boxes. The main reason was all that tax revenue.

You don’t have to be expert in city finances to see why this was so dumb. Just think about it. First, sprawl is super expensive. Big box stores cost local governments a lot more in services, like road maintenance & police, than compact “Main Street” style districts do.

Second, even when they’re new, big-box stores generate far less tax revenue per acre than downtown and neighborhood business districts do. This is because parking lots have little value and their buildings are cheap too.

Walmart, Home Depot, Target – they all presented a very different picture to cities about how this was durable economic development. But city officials should have known better. It was not hard to see the truth. 

So this whole push the mega-retailers are making today to have their stores reassessed as basically worthless is them doing the big reveal on what was true all along. 

Well-built, multi-story, mixed used business districts can endure for centuries. They are durable, flexible, adaptable as things change. They are great habitat for incubating new entrepreneurs. They are great at nurturing social & civic engagement. 

More towns and cities should have defended these districts rather than handing over their future to big-box sprawl. 

But – and this is important – I want to be clear about what should happen now. As stupid as city officials were, communities should not be paying the price for Walmart’s wealth and dominance.

The “dark store” tactic these companies are using to slash their property taxes should be outlawed by state legislatures. There are bills in these states to do so. And then cities should pass a special tax on big-box stores to make up for all the additional costs they impose.

Finally, cities need to get wise to the fact that not all development is actually economic development. If it furthers the power of the biggest companies, it’s often extractive. 
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Here’s your first test, cities: Amazon. Extractive or additive? Should you give it subsidies? Should you shift your procurement to Amazon? Or should you call for vigorous antitrust action to check its power? 

"Watch ILSR’s Stacy Mitchell on Why Cities Need Independent Businesses."

At about the 14:00 minute mark, Mitchell surveys reasons for sharply rising commercial rents. Using her native Portland ME as an example, she points to a few potential public policy solutions for "market distorting forces."

It's music to the ears of indie business owners. The video lasts 24 minutes, which is 24 minutes more than Develop New Albany has contributed to this topic in New Albany during 2017. But it was a pleasant sombrero walk eh?

There needs to be an independent business alliance in New Albany. Just because it hasn't worked before doesn't mean it won't now.

Independent locally-owned small businesses are mistaken to think that this hurdle (sustainability) can be cleared by disengagement, or by waiting for this or any other city government to dictate the terms.

Rather, independent locally-owned small business owners must evade the intended diversion of time spent micromanaging periodic events and instead put their mouths where their money is by heeding the advice of the American Independent Business Alliance and embracing a simple but eloquent truth: "There truly is strength in numbers."

It's simple. Of the local officials assigned to "help" small local businesses, how many actually have ever owned a business?

Thought so. Does this even make sense?

Watch ILSR’s Stacy Mitchell on Why Cities Need Independent Businesses, by Stacy Mitchell (Institute for Local Self-Reliance)

In this 20-minute talk, ILSR’s Stacy Mitchell looks at why cities need independent businesses, and also at some of the issues that are facing these businesses today — and why cities need to use public policy to respond.

“Ownership matters,” Stacy notes in the talk, citing research that quantifies the benefits of a strong local economy. “Communities that possess a degree of economic self-reliance are also in a better position to solve problems, to take care of one another, to be places that are connected by a network of relationships.”

“There are things affecting local businesses that are driven by the market here, but then there are other forces at work. Things that don’t really have to do with what our needs are locally,” Stacy continues. “That’s really what public policy should adjust.”

Stacy gave this talk in September at an event organized by Portland Buy Local, the independent business alliance in Portland, Me.

These handy visuals illustrate "The Ripple Effect When You Shop Local."

Business owners, it's a big, unanswered question.

Downtown business owners: Would you rather Jeff Gahan "brand" you with his cult of personality, or "brand" yourselves with your own collective identity?

If the latter, then ...

ON THE AVENUES: There has never been a better time for an Independent Business Alliance in New Albany.

Now for a few facts for business owners and holiday shoppers alike.

The Ripple Effect When You Shop Local (Infographic)

Advocates for Independent Business

When you choose locally owned businesses for your shopping, you create a ripple effect. It starts with your own experience, and the benefits that you get from shopping at independent stores, like getting to rely on local retailers’ expertise.

But then, the effects keep going. By shopping at local stores, you connect with your community. You strengthen your local economy. And finally, as the circle of ripples extends out, you cast a vote for the American dream.

Here’s what happens when you shop with a locally owned business — starting with you.

"A first-of-its-kind co-op in the United States that pools members’ money to invest in commercial real estate."

When word of this real estate cooperative concept leaked into the board room at One Southern Indiana, Wendy Dant Chesser leaped to attention and said, "Communist? Not at River Ridge, and not on my watch."

How Neighbors Turned Unused Buildings into a Thriving Community Hub, by Christa Hillstrom (Yes! Magazine)

As rents rise and independent businesses in Minneapolis lose their leases to large national chains, a first-of-its-kind co-op found a solution.


 ... The building wasn’t held by absentee landlords or faraway developers, but by around 200 local people who owned the property collectively. They’re part of the Northeast Investment Cooperative (NEIC), a first-of-its-kind co-op in the United States that pools members’ money to invest in commercial real estate. They share profits, decision-making, and the community rewards of having, among other things, locally owned shops they want in their neighborhood.

The background:

In Minneapolis, like in many cities around the country, rising real estate demand meant independent stores were gradually replaced by bank branches, phone retailers, and upscale restaurants. From 2014 to 2016, commercial rent rose by 8 percent—more than four times the rate of inflation.

Nationwide, speculation-fueled rent increases are far outpacing the ability of small businesses to profit in sales from the growth, according to a report from the Institute for Local Self-Reliance (ILSR), a Minneapolis-based think tank. The result is that many businesses lose their leases to large national chains, whose brands give them leverage in rent negotiations.

“Too often, what we are seeing is that local businesses and people are bringing neighborhoods back, and then the value that is created by them collectively is being siphoned off by a small number of investors who don’t live in the neighborhood,” said Stacy Mitchell, co-director of the ILSR, pointing to the “loss of control” many Americans feel over their neighborhoods’ waning affordability and increasing sense of sameness. “Owning commercial real estate is the ultimate way to guard against being at the mercy of those forces.”

Before NEIC formed, the group behind it—some of whom knew each other through the local food co-op—wanted to get a foothold in the real estate market before this happened to their neighborhood. Board member Leslie Watson, one of the cooperative’s architects, said they would bat ideas around when they ran into each other at neighborhood classes and meetings: What if they headed off rising costs by buying up houses together? Or maybe commercial real estate? And what if they did it as an official cooperative?

By late 2011, they settled on an investment model that didn't exist anywhere else in the country.

Independent business peeps take note: The Institute for Local Self-Reliance is far more relevant than One Southern Indiana.

The ILSR's Stacy Mitchell tweeted these words earlier today.

We need to transform “buy local" from a consumers movement into a political movement.

I pumped my fist without realizing it. Here's a page (and an organization) worth every independent business person's time to monitor .

Independent Business: Building a Community-Scaled Economy

Overview

Places that are home to numerous locally owned businesses are more prosperous, sustainable, and resilient than those in which much of the economy is controlled by a few big corporations.

For more than a decade, ILSR has worked with elected officials, grassroots organizations, and business groups to implement policies that reduce the power of dominant corporations, revitalize neighborhood commercial districts, and strengthen and rebuild independent businesses. Today, there are encouraging signs that community-scaled enterprises are on the rise, charting a path toward a more just and sustainable economy.

Thursday Must Read Part 1: Upsides and downsides in a national independent business survey.

A survey of 3,200 independent businesses reveals both good and bad news.

Independent Businesses Report Growing Sales and Hiring, but Policies Tilted in Favor of Large Companies Hold Them Back, by Olivia LaVecchia (Institute for Local Self-Reliance)

A large national survey has found that public support for independent businesses led to brisk sales and a sharp increase in hiring in 2015, but biased policies and other obstacles are limiting their success.

Here's the pivot.

Local First initiatives are part of what’s strengthening independent businesses, the survey found. Two-thirds of respondents in cities with an active Local First, or “buy local,” campaign said that the initiative is having a noticeable positive impact on their business, citing benefits such as new customers and increased loyalty among existing customers.

About one-third of businesses in Local First cities also said that the initiative had led them to become more engaged in advocating on public policy issues, and 44 percent said that the campaign had made elected officials more aware and supportive of independent businesses.

That’s significant because the survey also found that independent businesses are facing a number of challenges, many related to public policy.

Public policy challenges, eh?

In New Albany, one virulent 800-lb public policy gorilla is downtown's one-way street grid, which study after study has proven to be harmful to the interests of small, local, independently-owned businesses.

And yet, more than a few business owners in New Albany either don't wish to "rock" the boat, or worse, to take the time to understand the issues involved.

Think about it: If one-way streets hurt businesses like yours, then they do so 24 hours a day, every day of the year. Conversely, reversion to two-way would help your business -- 24 hours a day, every day of the year. You're fighting a battle with one arm tied behind your back -- by the city itself. The fact that the likes of Bob Caesar lobbies against reform should be the clearest possible indication that reform is both correct and necessary.

Here's another public policy issue.

On the policy side of these challenges, majorities of the businesses surveyed said they would support legislation to cap the dollar value of the economic development tax breaks that companies are eligible to receive, and that they think regulators should more vigorously enforce antitrust laws against dominant companies.

Or, what happens when one type of business (for example, Flaherty and Collins) receives preferential benefits and tax breaks unavailable to others.

The Institute for Local Self-Reliance on building local equity through redistribution.

The Institute for Local Self-Reliance (ILSR) discusses the release of its 2015 annual report. I refer to this fact primarily owing to the opportunity to emphasize a specific passage.

Building Local Equity: ILSR’s Impact in 2015

 ... Since our founding, building equity has been a core value and aim of our work. The word “equity” originally meant fairness or equality. Today the term has degenerated into a narrow reference to the ownership of property or stock. A growing movement is trying to recapture its original emphasis, and is shaping public discourse from the neighborhoods of Baltimore to the Vatican to the Presidential campaign trail. ILSR is part of that movement.

The conventional debate about economic inequality focuses on income redistribution. We believe a redistribution of power makes possible a redistribution of income. 

ILSR fights the centralization of economic and political power in pivotal sectors – energy, waste, telecommunications, retail, and banking – and argues for decentralized systems and rules that are just and fair ...

Worth remembering: "Top 10 Reasons to Support Locally Owned Businesses."

We've been there before, so let's go there again.

Institute for Local Self Reliance

1. Local Character and Prosperity
In an increasingly homogenized world, communities that preserve their one-of-a-kind businesses and distinctive character have an economic advantage.

2. Community Well-Being
Locally owned businesses build strong communities by sustaining vibrant town centers, linking neighbors in a web of economic and social relationships, and contributing to local causes.

3. Local Decision-Making
Local ownership ensures that important decisions are made locally by people who live in the community and who will feel the impacts of those decisions.

4. Keeping Dollars in the Local Economy
Compared to chain stores, locally owned businesses recycle a much larger share of their revenue back into the local economy, enriching the whole community.

5. Job and Wages
Locally owned businesses create more jobs locally and, in some sectors, provide better wages and benefits than chains do.

6. Entrepreneurship
Entrepreneurship fuels America’s economic innovation and prosperity, and serves as a key means for families to move out of low-wage jobs and into the middle class.

7. Public Benefits and Costs
Local stores in town centers require comparatively little infrastructure and make more efficient use of public services relative to big box stores and strip shopping malls.

8. Environmental Sustainability
Local stores help to sustain vibrant, compact, walkable town centers-which in turn are essential to reducing sprawl, automobile use, habitat loss, and air and water pollution.

9. Competition
A marketplace of tens of thousands of small businesses is the best way to ensure innovation and low prices over the long-term.

10. Product Diversity
A multitude of small businesses, each selecting products based, not on a national sales plan, but on their own interests and the needs of their local customers, guarantees a much broader range of product choices.