Bigger isn’t always better. Contrary to popular belief, small, locally owned businesses often out-perform their “big box” and Fortune 500 competition—both in outright profitability and the value they bring to consumers, workers, and communities. Unlike mega-stores and multi-national chains like Wal-Mart, these small businesses stimulate the economy by buying supplies and services locally, adapt to (rather than fight against) higher local environmental and labor regulations, and stick around for many years, often many generations.
The Small-Mart Revolution details dozens of specific strategies small and home-based businesses are using to successfully out-compete the world’s largest companies. And it shows how consumers, investors, policymakers, and organizers can revitalize their own communities by supporting local businesses.
Michael H. Shuman is an economist, attorney, author, and entrepreneur, and a leading visionary on community economics. He’s Director of Local Economy Programs for Neighborhood Associates Corporation, and an Adjunct Professor at Bard Business School in New York City. He is also a Senior Researcher for Council Fire and Local Analytics, where he performed economic development analyses for states, local governments, and businesses around North America.
He is credited with being one of the architects of the 2012 JOBS Act and dozens of state laws overhauling securities regulation of crowdfunding. He has authored, coauthored, or edited ten books. His three most recent books are Put Your Money Where Your Life Is: How to Invest Locally Using Solo 401ks and Self-Directed IRAs; The Local Economy Solution: How Innovative, Self-Financing Pollinator Enterprises Can Grow Jobs and Prosperity; and Local Dollars, Local Sense: How to Shift Your Money from Wall Street to Main Street.
One of his previous books, The Small Mart Revolution: How Local Businesses Are Beating the Global Competition (Berrett-Koehler, 2006), received a bronze prize from the Independent Publishers Association for best business book of 2006. A prolific speaker, Shuman has given an average of more than one invited talk per week, mostly to local governments and universities, for the past 30 years in nearly every U.S. state and more than a dozen countries.
I ended up skimming the majority of this book, so my review is admittedly not fully informed.
This is NOT a book for the average consumer and not what I expected. I learned what LOIS and TINA stand for, and a few examples of how locally-owned businesses are competing against global "big box" giant corporations, but ultimately most of the book's content was steeped in dense business and economic development terminology. The book would probably be much more relevant to students of business, economics, and possibly urban/regional planning and public policy. It might also be helpful to entrepreneurs.
One of the small aspects that I really did appreciate was the author's continual cautioning of demonizing of the "big box" businesses, such as Wal-Mart...too easy a target. Although these type of businesses may not be as socially-responsible as smaller, locally-owned businesses, Shuman argues that LOIS retailers can, and SHOULD, still learn from the global giants in order to be competitive in the marketplace. Communities interested in reviving its economy and livability shouldn't necessarily be protesting the encroachment of big box stores but rather focus organizing efforts around methods to make existing local businesses more successful and beneficial to the community.
Sustainability requires that every community meet the needs of all its members (including plants and animals), present and future, without compromising the needs of other communities meeting the needs of their members, present and future.
Over the next sixty seconds Americans collectively will spend about $23 million. Every one of these dollars carries enormous power because every purchase is essentially a vote. It's a vote for a retailer, a vote for the local firms that supply the retailer, a vote for the communities where all these businesses operate. Unlike political elections, which are so rare and irrelevant that most eligible voters in this country have stopped participating, economic elections never stop. Everyone is eligible to participate, even children. Every single day, every hour, every minute we are opening our wallets and casting our ballots.
I am always trying to learn more about economics. Michael talks about a community exporting three or four items and then importing the same from other countries. Even someone with limited economic knowledge like myself, knows this doesn't make sense. Michael delves into other examples like this and it's why I find the book interesting.
What I think the book illustrates, although doesn't neon sign, is the more emphasis that is placed on local living, the more natural and organic the business collaboration appears to be. And from this blossoms knowledge, learning, ideas and wisdom. I am a huge proponent for crossing the boundaries of one's industry to learn from others and the small-mart way is an excellent roadmap.
Independence has long ceased to be the American credo, supplanted by another: efficiency. Throughout the 20th century, small businesses supporting towns and families were devoured by larger firms, big businesses who gave little back to the communities they colonized other than an infrastructure burden and a handful of jobs. But Michael Shuman holds that it ain't over yet, and in The Small-Mart Revolution this entrepreneur argues that the titans have achilles' heels and citizens still have a choice. A combination of economic study and political jeremiad, Revolution is concise and feisty.
Shuman establishes a dichotomy early on; this is a story of TINA versus LOIS. TINA is the there-is-no-alternative mentality, the approach the United States has taken on in the modern age; it is the path of chasing and relying on big businesses for jobs, of sublimating the local economy to the globe. LOIS is the alternative, the locally-owned, import-substituting approach. Shuman begins with arguments for LOIS against TINA; not only do big firms invariably disappoint those who hunt them, accepting tax breaks and infrastructure put in on their behalf, only to skip town when another city offers an even better deal -- but the money they produce is lost to the host community. A Wal-Mart store forwards its take to Bentonville, Arkansas; it doesn't invest it in local banks, and most of the wealth is spent elsewhere. Money spent at a local firm, however, owed and staffed by locals, is subject to a multiplier effect. There are other considerations, like the folly of depending on fragile systems for vital resources. Why should a town rely on food shipped in from California when its own fields can produce enough to support the population? Shuman is not blind to David Ricardo's theory of comparative advantage -- that given communities and places are better at doing some things than others, so towns that have fields and mineral deposits might be better off plopping down a mineral-using factory on those fields and having the food shipped in from a place that only has food to specialize in. This makes perfect sense when thinking about people who want oranges in Michigan; the cost of growing them in greenhouses would be prohibitively expensive when they can buy from Florida and California. But why should people in Alabama buy pork from the Carolinas when only a generation ago, farms that incorporated livestock and agriculture were the norm? There are factors other than cost to consider, writes Shuman; shipping food from one side of the continent to the other is a waste of resources and an abusive of the environment, but the chief fact remains that we can't rely on the world's perpetual stability. Sooner or later a wrench is going to be thrown into the global economy; it may be a financial crisis or peak oil, but disruptions are inevitable. Centralization can be efficient up to a point, but decentralization is the option for health and safety. Reinvigorating local economies will not only restore vitality to our communities, but is prudent for national security as well.
All that is easy enough to say, but how is it to be done? Sure, a city in Alabama can buy local food --but local shoes? Local computers? For Shuman, the purely-local economy is a hopeless ideal; he doesn't wholly condemn big businesses, either, but regards dependence on them as folly. If lessons can be taken from their business practices, so much the better, but his mission is to restore vitality to local communities, an impossible task without restoring the local economy. After making his initial case, Shuman offers advice on how citizens, small businesses, public officials, national leaders, and even globally-minded persons can rely on and expand local economies.. Chapters are committed to each, and end with a list of actions each kind of activist can pursue. Individual steps are obvious; visit farmers markets, use local hardware stores, invest money in credit unions -- but business owners can ally together in cooperatives to gain some of the advantages of the Goliaths without compromising themselves or their places. Shuman also explores territory outside the usual advice by urging people to invest locally, something not easy given legal structures that favor the New York exchange. Dismantling the obstacles to helping big business flourish, from zoning laws to financial support for corporations that are wealthy enough to pay for their own parking lots, is also key.
This is in short quite an interesting book, of considerable interest to those concerned about the wellbeing of their communities, especially their economies. While no community will ever stop participating in the global economy so long there is wind to fill the sails of ships, providing more needs locally is a surer course to curbing high unemployment and staying adaptable than TINA. Prudence is demanded, but Shuman offers ways we can restore communities without falling too much afoul of economic reality.
Related: Strong Towns, Chuck Marohn. His blog has commented on growing local jobs rather than Human Scale, Kirkpatrick Sale The work of Wendell Berry, especially Home Economics Suburban Nation, Andres Duany et. al Eaarth, Bill McKibben
Shuman combines history, economics, and politics to give a striking view of main street businesses in the United States. The information is clear, detailed, and well grounded. Though I noticed it is missing a view of racial equity. In some chapters, absences of race disparities are fairly easy to spot. So I will be doing research to fill in the gaps.
I became familiar with Michael Shuman via Youtube where, upon looking for videos regarding community development, I found recordings of some of his public speaking engagements. Shuman is a lawyer, an economist, and a business owner. He synthesizes his knowledge throughout this text.
This was a really good little book. The book seemed less to do with "how local businesses are beating the global competition" and more to do with expounding reasons and examples of why it's paramount to support local businesses, first and foremost, before throwing way money into large businesses that ultimately siphon money from the local economy.
To demonstrate his premises, Shuman personifies two competing economic theories. For big business and the top-down support of its existence enters TINA (There Is No Alternative). On the other side of the coin, for the good of the local economy there is LOIS (Local Ownership and Import Substitution). If you're reading this review of this book, you can probably figure out the basic stances of TINA and LOIS. Shuman makes exellent cases for LOIS, both in theory and through real-world examples.
I found it to be particularly interesting to learn about major institutions, like Hershey's, as well as the Green Bay Packers, that are, in essence, locally-owned businesses, with stocks owned by the community or a charitable trust. In this light, Shuman doesn't argue that smaller is necessary as much as the idea that local is best, at least when possible and feasible. Local can be big, but the basic idea is that locally-based businesses keep, more often than not, money in the local economy, whereas dollars spent elsewhere, be it through big box retailers or even small businesses that reside outside your local area, lack the multiplier effect created by keeping a small town or city's monies at home. Local business owners tend to live locally, bank locally, shop locally, own property and pay more taxes locally. $100 spent in a local business stays local longer. $100 spent elsewhere quickly and more effectively supports the economy of another region, not to mention corporations that put small businesses under the bus and drive wages down and even bankrupt communities.
This is a simplified explanation and review of a very practical and convincing text that should serve as an excellent introduction to the importance of buying local; as well it may serve as a handbook for grassroots activists and community/civic-minded individuals who desire to enhance their local economy by focusing on and developing their inherent assets and social capital rather than importing a revenue-draining big-business that may or may not decide to offshore or otherwise leave town and shut down jobs, devastating communities in the process.
In The Small-Mart Revolution, we see the battle between TINA and LOIS play out in the pages, with Shuman showing us why LOIS wins. No, these aren't two broads in a fist-fight; it's a battle between a conventional economy built around big business and the logic that "there is no alternative" (TINA) versus the viable alternative of "local ownership and import substitution" (LOIS) that is gaining acceptance.
The introduction of this book in which Shuman tackles the idea of "Small-Mart" against the backdrop of "Wal-Mart" made reading this book immediately worthwhile. One of the great things that Shuman executes in this book is not only showing the reader why LOIS can succeed, but also how we as individuals and communities can practically support local ownership, as consumers, entrepreneurs, policymakers, investors, and community builders. We even get a glimpse of how LOIS could change the entire global landscape for the better by the end. My big takeaway: more dollars that are spent in the community and stay in the community will make your community stronger. The strength of one's own community will only encourage the strength and self-reliance of neighboring communities, too.
If you're interested in economics and the pros and cons of "local" movements, then I highly recommend this book.
This book is difficult not because of the writing style or the material, but because the solutions provided are nearly all long-term and require cooperation. Does he not get that we are Americans and therefore require easy, immediate, individual solutions?
I say thing tongue in cheek, but truthfully this was a stumbling block for me, and probably for others. He doesn't waste time pointing this out, which is both a compliment to us and a disservice to the wider acceptance of his book.
That said, I learned a lot about small businesses and their role in the wider economy and I feel like a more confident supporter of such places and the economic policies that support them. Rather than just a general "buy local" sentiment, I actually can articulate why I support this AND how to think through each choice. (ex: if a local manufacturer purchases parts from China how much better is that than just buying straight from China?)
Anyway, I would recommend it even if you are only mildly curious about this topic.
The author argues that, in this age of conglomeration, not only is it not inevitable that nonlocal chain businesses will rule the world but that it's actually not good for local communities to be reliant on them (e.g., the eggs-in-a-basket problem, when a nonlocal, typically large, company dominating the business landscape in a community decides to leave, despite the huge investments sunk into persuading the business to come and the tax and other incentives the community has been throwing at this company to induce it to stay). The author shows how we can help LOIS (locally owned, import substitution) businesses, and therefore the communities in which they are based, from various perspectives, e.g., investments, consumption, and policy.
I really liked this book, though you have to be pretty excited about the economy to get in to it. It moved right past Walmart bashing (some of the first chapter) and argued for keeping as much business and production local and the advantages of keeping money circulating locally. He outlines how he thinks that is possible and then branches out to cover all different kinds of business models, investors and even the global economy. He doesn't say that everything should be local, but does show how some local business are beating mega corporate rates of return. And he has lists for each type of player in the economy and what they can do to support their city or region. I'm convinced he's on to something and I'm moving all my banking to the credit union. You should too!
the author goes into the TRUE cost of savings through concrete examples and a good deal of citations. He reasons why it is better to choose local retailers over big box, while at the same time doesn't cry for blind localism.
Anyone interested in community development should read this book, which is pretty much everyone, because right now, I definitely believe that a majority of the ideas presented in this book should be taken up by as many people as possible (globally).
There are also bullet point lists at the end of each chapter summarizing what was in the chapter and what individuals can do. Great for going back as a reference in the future.
Don't let my 3 star rating mislead you...this was a great book, well written and very well researched by an innovative mover and shaker...it was just a bit clunky, each chapter in the second half was focused for a different audience so I was wading through economic talk for global leaders and politicians when what I was looking for was individual talk. It was good for me though to get a good, clear, rounded picture and so I read it all. Very thoughtful discussion with plenty of resources. I'd suggest this as a read for business owners, local politicians and anyone looking for basis in creating sustainable LOIS business focus.
So this is the book that introduced me to Michael Shuman. Start with this book and feel the warmth that grows from learning your friends and neighbors can still succeed against massive corporations. then read his next two books and feel emboldened to go out and make things happen.
Three books later and Michael's input is still current, engaging and absorbable. What I have learned by interacting with Michael's books is that he doesn't just care, doesn't just believe but he has the data, the examples of how local works.
I agreed with this book, but I think I would have appreciated it more if I were a policy-maker or owned my own business; definitely recommended for either. I may re-read it in the future when I do have my own business. On the other hand, it does include some good information for those who are uncertain about whether it matters to shop locally, and helpful lists for things like how to prioritize your local shopping.
Walmart and the other national chains are depleting our local economies and making our lives more expensive to live. This is a great book about how we can fight these multinational bloodsuckers from draining our local resources through the development of small, locally-owned businesses that retain the vast majority of their revenues where they live and work.
It was pretty good, but suffered from dissertation-itis. I like his concepts a lot, and was really tempted to mail a copy to our county economic development officer. They keep trying to get an industry in here like it will solve all our problems.
I expected to like this book more than I actually did, but it's still worth a read. And a month after finishing it the concepts are still with me. It has effected some of my decision and gotten me thinking a lot more about the local economy.
Good book on the importance of local purchasing dollars vs Walmart and other bigger companies. Definitely impacted my purchasing decisions. Too many stats to keep my interest on some areas for pleasure reading though.
This book is a good overview of buying & living locally. Some chapters are more reference-y than others; it's not likely that every person will find every chapter equally useful. However, it's a good read if you want to start-- or extend-- spending your money in your community.
Lots of ideas for localizing business transactions to generate those "jobs" politicians--operating solely under a tired model of subsidizing only huge businesses--fail to deliver.
I must admit that I was far more inspired by hearing him in person though than I was by the book.
This book had many interesting points about how we save when we shop 'local first.' I liked it mostly because it talk about agriculture (the actual oldest profession) as the profession that could save us all.