"Hyperlocal" is the new buzzword for business marketing strategy, but the concept of building up a business based on local roots is an age-old notion. It is the support of local communities that enable merchants to thrive. In 2003, I opened my first retail location for Tailwaggers in Hollywood, CA, and relied on local support to grow and build a reputation. This led to opening a second location, and then a third, and an e-commerce site for broader distribution. Tailwaggers became a fixture in the Hollywood community and our front stoop even became a safe haven for pets when they escaped their yards (or perhaps it was their incredible sense of smell that often led them to our store without their owners). In short, my business would not be what it is today without the support of my initial circle, my local community.
But the path to this expansion was not easy.
Unfortunately, big banks -- which offer a number of attractive products for small businesses -- do not give enough weight (if any) to the "subjective" when analyzing risk for small business loans. Because of this, entrepreneurs often struggle with the "chicken and egg" adage (or is it the "build it and they will come" prophesy?). In short, banks typically don't want to invest in unproven business ideas, regardless of how passionate an owner may be.
Luckily, small merchants today have a number of capital alternatives -- from crowdfunding to receivables financing to grants. I had the good fortune to hear about an option through American Express called Merchant Financing, which served as a loan given to fund my business operations based primarily on my longstanding relationship with the company. I was able to buy larger amounts of inventory so I could compete on price with big-box pet care stores. Exploring many different funding avenues led me to find that this was best for my expanding business, but every business' needs are different.
In the end, I had to make sacrifices and go through some difficult times to ultimately find this particular path to cash flow, and I couldn't have done it without first building a business based on local relationships.