Your business is important to you.
Have you thought about whether your business matters to anyone else?
The answer to this question is known as economic impact. When a stone is dropped in a river, the stone’s impact pushes waves outward through the water. The money dispersed through your business passes through Brentwood, Williamson County, Davidson County, central Tennessee—and beyond. Your expenditures create waves through this region’s economy.
The nearest wave is the smallest in diameter but higher and more forceful than the others because it is the most direct. Your business’s direct impact is all your financial outlay: payroll, insurance, taxes, supplies, vehicles and gas, vehicle maintenance, rent/lease/mortgage, building maintenance, utilities, and the list goes on and on. If you want to know the direct economic impact of your business, look at your total expenditures for a year. You will see how important your business is to many other people.
The second wave is not so high as the first, but it is larger in diameter. It moves farther from the center. Your business impact moves indirectly through the economy as your direct financial outlay is being spent by the people and businesses you paid. Because your business spent money, these businesses, families, and individuals have money to spend.
Based on your direct financial outlay and the resulting purchases by organizations and individuals with whom your operation does business, you can determine a total economic impact by using multipliers. The idea of multipliers is based on the fact that when a person spends money at a gas station, for example, that purchase supports the budget responsibilities of the station attendant, who will buy groceries, pay rent, and so on.
These multipliers vary from region to region based on how a dollar is spent again and again within the same community.
Just as multiple waves move from the dropped stone, the impact of every dollar your business spends is multiplied in the community and the larger economy. Other businesses prosper because of your business financial expenditures.
However, economic impact is greater than the singular look at money, and that story is and of itself is important. Economic impact is the story of people and how their use of money impacts the economic vibrancy and quality of life in Brentwood and Williamson County. It is the story of people who have jobs and who make a difference for their families, their churches, their neighborhoods, and the lives they touch.
So, the next time you write a check, know your business matters—to a whole lot of people.