Building a Local Economy: An Interview with Bill Schweighofer

Bill Schweighofer

When people shop locally, a whole community benefits, according to Bill Schweighofer, President and CEO of The Honesdale National Bank and founding member of the Greater Honesdale Partnership. He talked about the idea of shopping locally and supporting local businesses in an interview recently.

The value of shopping local

TH: How does a community benefit when people shop locally?

Bill: When you shop locally, you don’t just help the merchant where you buy.  I’ve seen different studies that state when you shop locally about 60 percent of what you spend is recirculated in the local economy, but when it goes out of town, it’s gone.  When we think about it, we can think of money as the life-blood of an economy.  It circulates through the system.  Every time you take some out it weakens the system – in this case, the local economy.

The more you shop locally, the more employment there is, the more services are needed; businesses need to expand. It’s more all-encompassing than people realize. More taxes are paid, which helps the school district and the town. It’s a snowball effect. The money goes round and round in the community. The community-at-large benefits.

I ask people who work here at the bank to “spend your money in town.” I tell people, “If you work in Honesdale, buy in Honesdale. If you live in Wallenpaupack, shop there. If you’re from Forest City, buy in Forest City.”

TH: Can having a strong local economy help protect a community from bad times in our boom-and-bust global economy?

Bill: I do think it’s possible to be less dependent on outside economic forces, but we can’t insulate ourselves from the effects completely. When a significant part of the economy-at-large suffers, people don’t have as much disposable income. Take local real estate, for example—I had a real estate person tell me recently, ‘I feel more like a tour guide. People look and look, but they aren’t buying.’ We can’t isolate ourselves, but I do think we can be less affected by the wider economy.

I get so frustrated when I hear people say, “I went grocery shopping in Scranton.” Now some stores undoubtedly have some things you can’t get at Clark’s Sunrise Market, or McCaffrey’s, or Dave’s Super Duper or Weis, but most things can be purchased locally.  Many people will drive to Scranton as a kind of outing. Why not have your outing here? This is a beautiful town whether you’re shopping or just taking a walk up and down the streets. In addition, if you calculate your time, the wear and tear on the vehicle and the cost of gasoline, you’d save money shopping locally.

For 30 years or longer The Honesdale National Bank has been “beating the drum” regarding shop locally.   Every year I do radio ads encouraging people to shop locally. For a few years, we did a thing with the Wayne Independent to encourage people to shop locally. They would take pictures of people shopping in local stores. Once a week, a photo would run in the newspaper. If you saw your picture and called or stopped in at one of our offices, we’d give you $25 in HNB bucks. They could spend those HNB Bucks at local merchants and the merchant would bring those to us and we’d exchange it for real money. Almost every merchant in town was taking HNB bucks.

Greater Honesdale Partnership

TH: How did the Greater Honesdale Partnership get started?

Bill: When GHP started, about 20 years ago, there were approximately 27 or 29 empty storefronts on Main Street. A group of concerned people got together to talk about what we could do to breathe life back into this town. Our initial goal was to come up with a way to attract other businesses here. We talked about what we needed to do to make this town more attractive. I know that sometimes when I drive into a town I think, “This is a neat little town,” and I’ll stop and walk around. On the other hand, there are some towns you just drive through. We want to be the former.

We wanted there to be an incentive for people to come to Honesdale, to bring people here to open a business. We worked with the radio station. We would help you pay for a sign (for your business). We’d give you free business cards. Our goal is still to make this town appealing to businesses, and we asked ourselves,  ”What can we do to foster a relationship of interdependency between businesses? What can we do to help them utilize each other?” Each one helps sustain the other one. This was the idea behind forming GHP.

GHP started out loosely with a group of people; then we decided on by-laws and elected a board. For years it was hard to find people for the board, but now, starting about three years ago, we began having more people interested in being on board than we had openings. To me this is a sign of the progress we’re making in this town.

Banking locally, too

TH: I know a few people who have taken their money out of the big multinational banks and brought their deposits home to local banks in our area. As a banker, what are the benefits when people bank and invest locally?

Bill: When people deposit their money and invest locally, that money gets reinvested locally in their community. From where I sit, we only do well if the community we serve does well.  So, our focus is on the communities that we serve, where we have branches. That’s all we have; we focus on relationships.

We know the people who run the local businesses, we know their families. We sponsor their baseball and soccer teams. We donate money and support local charities. Maybe the big banks do, too, but it’s not the same.  Their roots aren’t here, and this community is not their primary focus.

There are more than 7,500 banks in this country. Ten of these are very large, international banks, and they hold 60 percent of all the deposits in the country.  At a local bank, when we lend money to a small business and that business succeeds, it increases the tax base, it helps the infrastructure. It generates local employment, and raises the quality of life in the community.  It leads to improved water and sewer systems, better libraries, more parks and recreation areas, road improvements, and increased police protection, just to name a few.   Also, when we loan to individuals, it improves the quality of their own life.

TH: What will it take to build a stronger local economy?

Bill: We need to work together. It has to be a collaborative effort to be beneficial for our community. It’s all about doing the right thing. In our bank, I tell people, “It’s about doing the right thing for the customer. Maybe it’s not the best thing for the bank right now, but if it helps people, helps the community, then it’s the right thing to do. If people shop and invest locally, it’s the right thing to do for their community.