We recently released our 2023 State of Local report, which intends to serve as a benchmarking tool for local businesses in the Richmond region. Today, we’re taking a look at the first section of this report regarding the economic and cultural impact including local businesses’ profitability and revenue generation, job opportunities, utilization of commercial real estate, and the creation of vibrant business spaces.
Sure, we know that local business contributes economically but it’s important to note the distinctive ways in which they contribute to our community. Most significantly, local businesses contribute more to local tax revenue, generate more job creation, significantly increase the beautification of our business corridors, and support our commercial real estate sector.
Economic contributions
According to a study by the American Independent Business Alliance, for every $100 spent at a local business, $68 stays within the community, compared to only $43 when spent at a non-local business.
Our report has revealed an impressive combined revenue of $173,000,000 generated by local businesses in 2022. This substantial economic stimulation is undoubtedly making a significant impact in our region. Importantly, this success lays a strong foundation for local businesses, as it translates to more money staying within our community. With increased funds, businesses can reinvest in their operations, ensuring long-term sustainability and fostering further growth.
It is encouraging to note that 57% of businesses reported ending 2022 with profits. This positive financial outlook speaks to the resilience and competence of our local entrepreneurs, who continue to drive the economic vibrancy of our community.
Job creation
The local job market is showing a positive trend, with 52% of respondents currently hiring. This indicates that a significant portion of businesses in the area are either expanding, experiencing growth, or have job openings for various reasons.
In our 2022 workforce survey, we gained further insights into the hiring patterns of local businesses. Of the respondents, 60% were hiring for hourly positions, 9% were exclusively for salaried roles, and 31% were offering a mix of both hourly and salaried positions. It’s worth noting that for those hiring hourly positions, the average wage rate was $16 per hour.
A healthy job market is not only beneficial for individuals seeking employment but also contributes to the overall prosperity and well-being of the entire community. It sets in motion a positive cycle of economic growth, social welfare, and civic engagement, making our community more resilient and sustainable in the long term.
Beautification & Commercial real estate
According to data from the Richmond Association of Realtors, the Richmond region boasts an estimated 100 million square feet of commercial real estate property. This vast expanse reflects the dynamic and diverse business landscape that contributes to our community’s growth and prosperity.
Interestingly, respondents to our survey occupy approximately 554,000 square feet of this commercial space, showcasing the active presence and influence of local businesses in our region.
One notable trend shaping the commercial real estate landscape is the rise of mixed-use spaces. This shift is driven by various factors, including the area’s ongoing growth, the surging demand for walkable neighborhoods, and the preference for businesses to operate in vibrant and active areas. This development is particularly advantageous for local businesses, as it creates an environment that fosters collaboration and draws customers, enhancing their potential for success.
Cultural Impact
Finally, we look a the cultural impact of local businesses in our community. While this marker is more nuanced and less measurable, it is a critical component of what local business contributes to our community. Respondents noted their most important role in our community is reflecting the community’s unique character, offering personalized products and services that larger corporations can’t replicate. Moreover, local businesses often invest in community development, supporting events, charities, and organizations, nurturing civic pride and social cohesion.
The findings in this first section underscore the resilience and growth of businesses in our community, even amidst concerns for the economy. Despite the challenges, our community continues to thrive, attracting and supporting a diverse range of businesses. This positive momentum signals a promising outlook for the future, as our community remains dynamic and adaptable to change.
Read more and see how your own business stacks up with the full report here.