The Velocity of Money
Introducing this book takes a little background. Just bear with me here…I read a quote about the velocity of money and it started me thinking, wanting to learn more. It goes something like this: Compare two scenarios. In one I pay $10 to my hairdresser. She takes that $10 and buys a sandwich at a local deli. The vendor takes that same $10 and buys…I think you can see where this is going. What happens if instead, I take that $10 and put it into my savings account? The difference is the movement of money.
Now I’m all for savings, of course, but when about $15 trillion of the US resources is stagnating in nonliquid accounts, it isn’t helping the economy or any of our small businesses. All of this cogitating caused me to pick up Local Dollars, Local Sense. It’s all about shifting money from Wall Street to Main Street, and I’m definitely for that. Being small business owners, so are you. This isn’t a brank new book, hot off the press, but it is a book full of common sense. If you’ve read it before, give it another look. If you haven’t read it, let some of these ideas filter their way into your business.
Local Dollars, Local Sense is written by Michael H Shuman, and he covers things like a zero-cost stimulus, the hidden power of cooperatives and local exchanges. Could we partner and do more locally to stimulate Main Street? Probably, and we don’t have to wait for something magical to develop. No special program is required. Simply think of another local business that complements yours, and reach out. Figure out a way to benefit one another. Shuman emphasizes the need to shift our investing dollars from large corporations into the sweet spot where most of our growth comes from—small business.
What might this look like? With a little ingenuity, products from one business could also feature inventory displayed in the office of another. Two businesses might go together to fund mutual advertising via social media. We can encourage legislation to free up local investments. We can form cooperatives favoring the purchasing power of our small businesses. We can encourage entrepreneurship by inviting new businesses to special savings in our own established businesses. None of these ideas require committees, just collaboration.
I looked at two books this week and chose this one simply because I believe we can do better. I’m not advocating defunding our mutual funds and 401s, but rather, beginning by creating a toe hold in the future of Blue Springs. As we see our money reflected in the real wealth of local enterprises, the lure of phantom wealth in some speculative stock will begin to fade.
Buy from one another within the Chamber when possible. Let’s partner with another business and help each other grow. I think we’d all like to see a stronger Main Street and for all of our businesses to prosper. It’s time to do something about that!