Most economists prefer talking about the big picture of a nation's financial health. I see the tens of thousands of sole traders and small operations that tick over in local neighborhoods, satisfying community needs and keeping local economies alive. The good news? A recent survey shows local entrepreneurs live longer and have better lives than the people who work for others. Yes, there can be more stress when times are hard, but most have a better work-life balance, finding comfort and support in the family. So what is it that these local business owners are doing?

Conventional wisdom says business is all about profit. Let's not get sentimental about providing employment to local people, or keeping businesses alive to serve local needs. Let's just look at the costs of paying those you employ, the utilities that supply you, the rent or mortgage on the premises you occupy, and so on. All of these feed into the ever-important bottom line. Because your customers have less disposable income, sales for goods and services have been falling. This puts a squeeze on and the only way to stay in profit is to cut costs. If we head down into a recession, cuts are not just an option. Survival forces them. Except there are compensations. Running a business gives you access to discounts and potential tax savings on all major goods and services. So owners can often subsidise their lifestyles within the current trading and tax systems. Even if you cannot get access to discounts individually, joining trade associations and the local chamber of commerce often brings significant savings. Once businesses pool their buying power, suppliers usually offer better terms.

Small operations have been most affected in the business insurance market. Premiums have been rising more rapidly than inflation, putting ever more pressure on the smaller operations. The reasons? Let's just say there's a vicious circle. As more find the premiums unaffordable and drop out, the cost of the risk must be divided among the remaining policy holders. That's where the buying strength of an association or chamber of commerce comes in. The more businesses pool the risk with the same insurance carrier, the lower the premiums. So, when it comes to small business insurance, there's strength in numbers and, if real savings are to be made, collective action is best an irony we need not talk about too loudly in these days of capitalism. The other advantage is the avoidance of commission payments to agents. If owners stay independent and seek the best deals through an agent, they pay for the advice and the full premium. Collective negotiation directly with the carrier produces savings on premiums and cuts out the payment to the "middleman".