'Source Local' Movement Hits Small Business Community

Teresa Delfin, whose startup Mountain Mama makes outdoorsy clothing for pregnant adventurers, has discovered the secret to success not far from her own backyard.

Less than a 40-minute drive from Mountain Mama’s headquarters in Ontario, Calif., is the mill that weaves the business’ proprietary fabric. Just 17 miles away is the factory where it’s cut, sewn, tagged, and bagged. Care labels are printed in nearby Los Angeles, and the zippers are made 30 miles from there in Anaheim.

“Keeping things local allows us more flexibility and spontaneity, so our lead times don't have to be as long as they usually are in the apparel industry,” Delfin says. “When our Facebook community began clamoring for Mountain Mama to make a swimsuit, we were able to design, make patterns, source fabric, sew samples, and include the suit in our photo shoot in just six weeks.”

The infectious success of the “Buy Local” and “Think Local First” movements aimed at consumers nationwide is catching on with independent businesses themselves. Practicing what they preach, local businesses are using as many local resources as possible -- from materials to suppliers to craftspeople to furnishings. Not only are they bettering their community, many find it’s a great money saver and an even better marketing tool.

“It's a win-win-win,” says Bethany Mateosian, owner of Springboard Pilates in Portland, Maine, which banks locally, runs contests to donate to nearby charities, and uses a hometown vendor for free snacks for clients. “We market in the sense that we tell clients where we donate money and where the snacks come from. It is essentially their money that we are rerouting further into the community.”

Call it “Source Local” or “Source Local First,” it is a new twist on the homespun consumer trend that has been picking up speed over the past four years and is closer than ever to critical mass. Today, if a consumer spends $100 at a local business, $45 stays in the community. The same amount spent at a national chain keeps only $14 in your own backyard, according to the nonprofit Institute for Local Self-Reliance.

According to the ILSR, the $45 comes from payroll, which goes into local pockets, the purchase of local goods and services from other businesses, hiring local help such as accountants and Web developers, and supporting local charities.

Campaigns to keep your money where your home is are growing at a rate of about 25 percent a year, championed by independent business alliances. Already, those campaigns are underway in 70 cities, including New Orleans and Portland, Maine, according to ILSR.

Unexpectedly, the consumer campaigns have also boosted local business-to-business activity. Portland’s Buy Local campaign prompted 60 percent of its member businesses to seek out local, independently owned companies for services and goods they previously purchased from nonlocal sources, according to a member survey.

"Buy local campaigns appear to be causing local businesses to source even more from local providers. We expect that may cause the $45 figure to rise even higher over time," said Stacy Mitchell, ILSR spokesperson, referring to the money that stays in the community.

National retailers might take issue with the ILSR’s claims, said Ellen Davis, vice president of the National Retail Federation.

“We believe people should shop from local stores, national chains, and online,” Davis says. “Sometimes we get so wrapped up in the idea of independently owned businesses versus chains that we forget what chains bring to the table. Large retail stores employ large numbers of local people, their managers live in the community, and many national retailers also donate a portion of their sales to the community.”

And even the smaller businesses can’t always keep the business entirely local. More businesses would like to jump on the bandwagon but are hindered by obstacles, according to a survey conducted by the New England Local Business Forum and the ILSR. The poll of more than 100 independent retailers in New England found that almost all (98 percent) would like to source more of their inventory from manufacturers and other producers within the region. The biggest roadblock is a lack of an easy and efficient way to identify local resources. The retailers surveyed said a solution is possible -- they proposed a website showcasing regional producers and facilitating wholesale orders, getting assistance identifying local producers, or having a tradeshow of New England manufacturers -- but no one has come up with a way to pay for it.

Using local sources has worked for small businesses like Hat City Kitchen in Orange, N.J., a restaurant and bar that pumps profits back into a local artists' cooperative whose members' works decorate the walls. Chef Patrick Pierre-Jerome cooks with vegetables from a cooperative greenhouse just two blocks away. It’s run by Garden State Urban Farms, which employs ex-convicts with a nonviolent history and has been so successful that it’s planning to expand its training program to include local high school students. “Being so close, I get to use fresh ingredients that go from farm to table in a matter of hours,” Pierre-Jerome says.

A sense of community also keeps interior designer Liz Goldberg looking for talent close to home. Her interiors firm, Goldberg Design in Glastonbury, Conn., uses a cadre of independent local craftspeople and suppliers, including an upholsterer, a painter, and a custom kitchen store.

"It’s motivating because you’re selling a job not just for yourself but for your little community. You know the other people who will be getting work out of it," Goldberg says.

In Southern California, Delfin says Mountain Mama’s ability to maintain a Cinderella-sized footprint has allowed her to keep down payroll costs, transportation bills, and more.

“I can avoid hiring a production manager to oversee everything from milling to patternmaking to sewing, since I can do that myself,” says Delfin, who has four employees. “I also save a tremendous amount of money and time by not having to ship materials long distances. Domestic mills also often have smaller minimum order requirements than their counterparts overseas. As a startup, the minimums at many mills are simply prohibitive.”

Mountain Mama, which has been in business since July 2009 and actively selling since August 2010, has yet to see a profit but is projecting $150,000 in sales for the first year.

With the holiday gift-buying season coming up, Delfin hopes to transform her pride in being a “locavore” into a solid marketing and PR pitch.

“We're currently working up a graphic that helps communicate our tiny footprint, which will be at the heart of a new marketing campaign,” Delfin says. “Our PR firm, in nearby Los Angeles, of course, is pitching the story to various media outlets.”

Mountain Mama enjoys the fruits of local business sourcing in more ways than one. Each day, fruit is offered as an office snack -- fresh off the vine from a local cooperative farm that Delfin and her husband have a share in.