Can an iPhone App Save America's Small Businesses?

Cinda Baxter is on a mission: She wants to save America's small businesses. A little more than two years ago, the Minneapolis-based retail consultant launched the first attack in her battle: The 3/50 Project, a grassroots group that encourages consumers to patronize local brick-and-mortar merchants.

This month, The 3/50 Project announced its next move: LookLocal, an iPhone app that helps users to find locally owned "mom and pop" businesses.

Starting Local, Going National

Instead of fighting box stores directly or petitioning politicians, Baxter's project is taking a pragmatic, consumer-based approach to the problem of failing businesses. To encourage customers to reconsider their buying habits, it asked participants to choose three local businesses and commit to spending $50 per month in them. Although this move seems simple, its long-range impact could be huge. According to the project, if half of the employed population took part, its actions would generate more than $42.6 billion in revenue.

What's more, several studies have highlighted the impressive impact of local spending, suggesting that up to 68% of the money spent in mom and pop businesses stays in the local economy by generating payroll, taxes and other expenditures. By comparison, only 43% of the money spent in a national chain store stays in the community.

As part of its struggle to preserve local businesses, The 3/50 Project has developed a directory that visitors to its website could use to list local brick-and-mortar merchants. The LookLocal app links into this database, giving users instant access to names and information for more than 23,000 independent restaurants, stores, hotels and other services in their home towns -- or on the road. "No one has ever tried to do what this app is doing," Baxter claims. While many communities publish directories of local businesses and trade organizations often provide lists of their members, LookLocal "covers all types of independent brick-and-mortar stores. It goes from coast to coast and across the border into Canada."

Taking Small Businesses on the Road

LookLocal extends The 3/50 Project's focus beyond users' communities so they can also patronize independent retailers when they're on the road. Baxter says she's pleased by the public response: "Within the first 24 hours, we received 309 clicks and 220 downloads," she enthuses. She also notes that LookLocal is expanding, with Android and iPad apps on the way.

For her next move, Baxter muses that LookLocal could easily partner with other social-media sites, like Yelp, Zagat.com and Foursquare. "Ideally, I would love to see a badge system on all those sites," she says. For the time being, however, she says that LookLocal is proving itself to be a logical, effective way to help consumers find -- and help support -- locally-owned merchants. "We're not only on the right path, " she says, "but we're doing it in a way that works."

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.