The Difference Between Small and Local Businesses

Oct 02, 2023

The Difference Between Small Businesses and Local Businesses

When it comes to supporting the economy and fostering community growth, small businesses and local businesses play a crucial role. While these terms are often used interchangeably, there are some key differences between the two. In this blog post, we will explore the nuances and shed light on what sets small businesses apart from local businesses.

Size and Scope

One of the main distinctions between small businesses and local businesses lies in their size and scope. Small businesses are typically defined by their revenue, number of employees, or annual turnover. These can range from sole proprietorships to companies with up to 500 employees. Local businesses, on the other hand, refer to enterprises that operate within a specific geographic area, serving the needs of the local community.

small business

Community Impact

While both small businesses and local businesses contribute to the community, their impact differs in some ways. Small businesses often focus on providing goods or services to a broader customer base, sometimes extending beyond their local area. Local businesses, however, have a more concentrated impact on the immediate community. They are deeply embedded in the neighborhood and often prioritize building relationships with local customers.

local business

Supply Chain and Sourcing

Another aspect that sets small businesses apart from local businesses is their supply chain and sourcing practices. Small businesses may rely on global or national suppliers to meet their needs, often seeking the most cost-effective options. Local businesses, on the other hand, prioritize sourcing products and services locally whenever possible. This helps to support other local businesses and keeps money circulating within the community.

local sourcing

Community Engagement

Community engagement is another area where small businesses and local businesses differ. Small businesses may engage with the community through various channels, such as sponsorships or partnerships with local organizations. Local businesses, however, have a more direct and personal connection with their community. They often participate in neighborhood events, support local causes, and actively contribute to the overall well-being of the community.

community engagement

Customer Relationships

Building strong customer relationships is vital for both small businesses and local businesses. However, the nature of these relationships may vary. Small businesses often aim to attract a broader customer base and may prioritize online marketing and advertising to reach a wider audience. Local businesses, on the other hand, focus on building long-lasting relationships with their local customers. They rely on word-of-mouth referrals and personalized service to foster customer loyalty.

customer relationships

Flexibility and Adaptability

Due to their size and structure, small businesses tend to be more flexible and adaptable to market changes. They can quickly pivot their strategies and adapt to new trends or customer demands. Local businesses, while also capable of being flexible, may face additional challenges due to their deep roots in the community. They need to strike a balance between preserving their unique identity and embracing necessary changes to stay relevant.

flexibility and adaptability


While small businesses and local businesses share some similarities, their differences are significant. Small businesses encompass a broader range of enterprises based on size, while local businesses are more geographically focused. Both play an essential role in the economy and the community, but their impact and strategies may vary. Whether you choose to support a small business or a local business, remember that your patronage helps to sustain and strengthen the fabric of your community.