What is small? What is local?

I want to start off with the idea that I’m having a hard time getting started writing this particular post. I know the concepts I want to share but I’m having a difficult time articulating it in a coherent fashion. This post may seem rambling because of that and I apologize in advance. I want to talk about local business and small business. I want to talk about supporting your community. I also want to talk about what defines small business and what defines local business. Let’s see what I can do.

First, let me state unequivocally that I am a support of local business. Does that make them better than a larger corporation? Not necessarily. I just like knowing that when I go to Weird Brothers Coffee my purchase is supporting someone that lives down the street instead of going to Starbucks and supporting faceless stockholders. In my opinion, Weird Brothers makes better coffee but I don’t begrudge someone who prefers the product of Starbucks. They like what they like and that is fine by me. I just like giving my money to someone that lives in my neighborhood.

I feel this way about most of my purchases. I’d rather order from the small-business pizza place that is owned by a local resident than Dominos or Pizza Hut. I most certainly prefer to get my beer from one of the many breweries here in Northern Virginia than purchasing Bud Light or Michelob Ultra. I feel like if I can get my merchandise from a local purveyor of goods then I’m supporting my neighbors and, in some cases, my friends.

COVID-19 has started to shake my belief on “local” first a little bit. Not so much in the idea of supporting local businesses or small businesses. More in how I define “local” and “small”.

I’m sure many of you have heard in the news about the “big” businesses that are getting funds under the Paycheck Protection Program to support payroll during this time. Probably the most well known is Shake Shack returning $10 million of funds received under this program. They weren’t the only ones that received these funds intended for “small” businesses that received funding. The Los Angeles Lakers applied for and received funding under this program. AutoNation, a Fortune 500 company, applied for and received nearly $80 million in SBA loans. And they aren’t the only ones that received these funds.

My gut reaction was to be angry that businesses like these would even be eligible to get funding for “small” businesses. As a small business owner, I was lucky enough to get some funding but I know there are many small businesses that couldn’t even get in the door because of various banks not providing support or limiting the scope of who they would allow to submit applications. There are many “small” and “local” businesses that needed that help. These big companies were stealing money from the little guy.

Then I read this opinion piece in the Washington Post. I suggest you go read it but here are the finer points. The opinion was written by Sven-Olof Lindblad who is the CEO and Founder of Lindblad Expeditions. 

• Lindblad Expeditions is a 40-year-old cruise line that provides trips to Alaska, Antarctica, and other hard-to-reach places.

• Lindblad has nine ships that are currently sitting idle with no passengers to serve and 461 U.S. based employees that can’t work.

• The Paycheck Protection Program has a max of 500 employees per location (so a restaurant chain with less than 500 employees at one location would qualify) so Lindblad applied and received $6.6 million in PPP funding to help pay employees.

• While a $300-million market cap business, Lindblad isn’t huge but isn’t a mom-and-pop business by any definition.

• After it was reported that this “big” business accepted the loan there was concern from loyal guests “who could not reconcile their view of use as a responsible, and environmentally and culturally respectful, company with the idea of us taking funds from this program.”

• Lindblad decided to refund the PPP funds in the hope that the funds can be redistributed to small businesses in the travel industry.

• Now, Lindblad is in a place where they can’t obtain capital to pay their employees and with no ships sailing they can’t make any money. So now potentially 461 employees are out of work.

It made me question what is a “big” business and what is a “local” business. When I think of McDonald’s I certainly don’t think of a “small” business or a “local” business. But is that really true? Many McDonald’s are owned  by a local business and employ dozens or more people from the local community. The local business has a franchise agreement with McDonald’s for much of the product served but does that make it any less a local business than the “small” burger joint down the road who purchases their beef from the big-beef industry? 

When I think of Home Depot my first thought is certainly not “local”. But the Home Depot down the street is huge, offering supplies for both the individual looking to plant some flowers in the front yard to the hundreds of “local” contractors who are building our decks, fixing our toilets, and keeping our AC going in the summer? Does that not make it a local business even if the company is owned by stockholders?

I work for myself which is probably the very definition of a small business. I guess a business of one can’t really get much smaller. Most of my clients are within a 15-20 mile radius of my house. That is a pretty local client base. I’m not travelling across the country to work. I’d say I’m the definition of “local” and “small”. So when I heard of these “big” businesses getting funding I was struck and mad and sad.

But the more I thought about it the more I wasn’t sure what to make of the situation. I still don’t know. If my local Home Depot can’t pay employees because they don’t get funding that means hundreds of my neighbors would suddenly be unemployed. That thought makes me shiver. 

I still don’t know how to reconcile my love of “local” and “small” with the knowledge that the “big” and the “multinational” employ hundreds and thousands of my neighbors. I’ll still be getting my beer from as many Northern Virginia breweries as I can. I’ll still be ordering my pizza from the local pizza shop. I’ll still be grabbing my coffee from Weird Brothers. But I’ll have to think twice before judging those who drink Coors Light, eat Papa John’s Pizza, or drink a vanilla latte from Starbucks. In a way, those are all local products too.