What does this mean for Solano County? BUY LOCAL and stimulate our local economy. Buying local creates and sustains local employment, civic programs (through local tax revenue) and sustains our economy. Servpro of Fairfield supports our local economy and non profits."
Explaining the local economic multiplier effect or "local premium" is an essential component of effective "buy local" public education campaigns.
The multiplier effect is the boost to your local economy that results from locally-owned independent businesses, owners, and employees spending business revenue within the region. Typically, local independent businesses recirculate a much greater percentage of sales locally compared to absentee-owned businesses (or most locally-owned franchises*).
Total economic impact is determined by measuring three components -- the direct, indirect, and induced impacts.
- Direct impact is spending done by a business in the local economy to operate the business, including inventory, utilities, equipment and pay to employees.
- Indirect impact refers to the conventional multiplier that happens as dollars the local business spends at other area businesses re-circulate.
- Induced impact refers to the additional consumer spending that happens as employees, business owners and others spend their income in the local economy. go to article