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How & Why to Find a Locally-Owned Bank

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The velocity of the dollar.

Macro capitalism has given micro-capitalism a bad name. The purpose of capitalism is to create the velocity of the dollar locally – everyone prospers. Big biz takes that dollar away to “headquarters”. Here’s one way to keep your dollar in your town.

Hudson Bay Co. started in 1670 and was the largest landowner in the world for centuries – they are still in business. For thousands of years big businesses like that were always the exception, and our economies did not revolve around worshiping at the altar of Giant Corporation, Inc.

In the late 1800’s for the first time in history, giant corporations began to regularly spring up, but it wasn’t until the 1950s that the term “big business” became common place in the English lexicon.

Big business is a very new idea that many believe will have the same run that the railroads had. In 1903 the railroads had 97% of all inter-city traffic. Yet with the advent of the internal combustion engine, they were already dead and didn’t know it. In 2011, railroads provide 0.03% of inter-city traffic.

Giant corporations like Hudson Bay will always be around, just like railroads, but with the advent of the internet, nano technology and ease of travel, we are moving back locally. And that’s a good thing.

Capitalism always had the unintended good of “the velocity of the dollar”. I spend a dollar at the bakery, who spends it at the tailor shop, who spends it to buy some shrubs, who spends it at the local restaurant, etc. Everybody prospers. Giant Corporation, Inc. interrupts that process. I spend a dollar at Giant Corporation, Inc.’s local big-box and a good-sized chunk of that dollar is taken out of the local economy back to headquarters.

Here’s a great and easy place for us to start to bring the dollars back into local communities. Bank locally.

You can read why we’re leaving our giant bank and why we didn’t do it sooner here. We’re now beginning the process to look at which local bank we want to work with.

Here’s three easy steps you can take to do the same thing:

1) Find a financially healthy (4-5 star) local bank anywhere in America at this great website hosted by Bauer Financial – select your state and you will see only the banks that are headquartered in that state.

Within 15 minutes of doing this, I identified 5-6 local banks that we will be interviewing.

2) Before you decide which ones to interview, visit this site hosted by Pro Publica to see all the banks in the U.S. that took a bailout. In just a minute or two you can see if any of your local banks did. I dropped one of my potential choices after visiting this site.

3) Check out your finalist’s sites, interview them to see which one best fits your needs, and keep your dollar speeding around your own town, city and state.

The move to “shop locally” isn’t a fad. We’re just going back to where we lived for thousands of years. Check out ShopCity.com and ShopLocally.com while you’re at it.

Happy banking!

Be the Best in YOUR World by Making the Rules

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What are you good at?

I went to Home Depot last week to return the toilet guts I had bought nine months earlier that had stopped working. Turns out they knew what they were selling didn’t work locally but that didn’t stop them. It’s really hard to be the best nationally and locally. As a local business owner, you’ve got an unfair advantage.

I was more frustrated with myself than with Home Depot because I’d replaced the guts to four different toilets in our house every 12-18 months for the last 15 years without thinking about the five year warranty. I talked to the manager and asked why the innards were failing so often and he replied, “The water is really hard in Highlands Ranch and makes the plastic parts brittle.”

I asked why, if they knew all this time that the parts don’t work in Highlands Ranch, that they were still selling them. He replied “The buying decisions are all made in our headquarters in Atlanta.” We then went back to the plumbing parts department and he asked the plumbing expert if he knew if they had anything that resisted the hard water problems here (the store is in Highlands Ranch), and his short answer was “No”.

Apparently it’s widely and long held knowledge among local Home Depot staff that the parts they sell don’t work in our town, but since the buying decisions are made in Atlanta, it doesn’t dawn on them to look for a local solution, or at least post a sign that says “these are great parts but not here.”

A locally owned store has an unfair advantage over big box stores. While the manager of the big box may live locally and care deeply, he or she can’t often customize their offering to meet the unique needs of a local community.

Big box stores win when you play by their rules, so don’t do that. What are you good at that they can’t begin to replicate? Walmart may have low prices but have you ever tried to find someone to help you find the right tool or ask about which bicycle to buy? If you offer great and knowledgeable service, it’s a rule they can’t play by – it would cost too much for their low price rule. They can’t play by your rule – you win.

What are you really good at that the big box stores can’t touch? While they do some things well, what are the things that they just can’t do? Low prices usually mean lower service. Centralized national buying usually means parts that are good for everyone and not great for your particular town. I know a lot of local owners who are killing it by simply refusing to play by the big box store’s rules.

He who makes the rules wins.

Make some rules they can’t touch. You don’t have to be the best in the world to compete with the big box stores. Being local puts you in the best position to be the best in YOUR world, and when somebody wants a toilet part, that’s the only world that matters.

UPDATE – June 30, 2011 – ELEVEN MONTHS LATER.

In July of last year, Home Depot gave me the guts to the toilet. Those guts failed this week – eleven months later. The kit has a five-year warranty.

I took the failed kit back to Home Depot, explained to the manager that I had been given this free by the previous manager, so I didn’t have a receipt. He wouldn’t replace the failed kit without a receipt and told me to contact the manufacturer.

Since I have to buy a new kit, I’ll be doing so from a locally owned plumbing supply store, and will go out of my way to avoid Home Depot in the coming years for all other purchases.

I’m pretty sure a local business owner would have had a different response. Don’t you?

I’m also pretty sure I’ll be telling this customer service story worldwide in my keynotes and workshops for years to come. It’s a great example of why you should buy locally.

The Problem of Big

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I’m a Smallist.

In 2009 our economy was rated by the National Security Agency as a higher threat to our national security than terrorism. One side blamed big government and the other blamed big business and big banks. But virtually no one was angry with local business or local government. This is very instructive as to where the problem is and where the solution lies.

It is universally accepted that “too big to fail” businesses that are cozy with big government who will bail them out are the cause of recessions, and small business brings us out of them with no assistance whatsoever. Yet both sides patronize and ignore small business and are committed to big business or big government getting even bigger.

The issue is not with capitalism, free markets, government systems or bureaucrats; the issue is simply “the problem of big”.

Macro-Decisions for Micro-Problems

One problem with “big” is that both giant corporations and massive federal government make macro-decisions (national) to solve micro-problems (local), and every time they do it, somebody gets left out, hurt or dismissed as decisions are made to benefit the 80% and ignore the 20%.

The other problem with big is that Macro-capitalism results in the accumulation of wealth and decision-making in the hands of a very few people in business, and macro-government results in the accumulation of power and decision-making in the hands of a very few politicians. And as we’ve seen throughout political history, the reality is that these two “bigs” have a parasitic relationship that both sides use regularly to preserve and grow their own centralization of wealth and power, all to the detriment of local business and local government.

Local Business and Local Government

Does small always work better than big? No. It is easy to find both local businesses and local government that make self-preserving decisions that aren’t in the best interest of their employees or customers. But the negative affects are not as damaging and are always more apparent. And removing that local politician or shunning that local business is a lot easier.

Micro-solutions for Micro-problems

Even with the best of intentions it is simply too big a task to ask macro-entities to solve local problems. The problem isn’t government or business, but simply the size, massive reach and slow-grinding gears of both.

We need to return to local government and local business for answers to our local problems, and push as many decisions down the food chain as possible. This is difficult for both national politicians and big business leaders because they lose control over their own macro-wealth or macro-power. There is a place for both big business and big government, but I believe we would be better off and safer as a nation with less of both.

Big is Still the Problem

Neither government or business is inherently good or bad, but the bigger any system gets the more difficult it becomes for it to truly serve those in the system. Our economy would flourish with more and smaller competition, and societal problems would find much better solutions closer to home than in D.C. This is why I’m such a fan of local businesses and local government and am so committed to seeing them both flourish.

My focus is to take local businesses from survival, through success to significance. The better we do this the more partners we will have to solve local problems and create great local communities everywhere.