When American Express launched Small Business Saturday in 2010 I thought it was a great idea to encourage shoppers to patronize the small, locally owned, businesses in their area. With all the national chains and online merchants offering big discounts to consumers, it serves as a reminder that these small, local, businesses carry a lot of local economic punch.
Living out west, I spend a lot of time off the beaten path traveling through small towns from the seat of my motorcycle and have noticed that those communities with a healthy and thriving small business district are the cities and towns that seem to be strong and growing. Those where Main Street is boarded up, seem to be withering away. I’m convinced Main Street and small businesses are the lifeblood of every city and town across the United States, from New York to San Diego—and every small town in between.
Nevertheless, if you’re not convinced by my anecdotal evidence, there are some dollars-and-cents reasons why patronizing small businesses is a good idea.
The multiplier effect of patronizing local businesses has been quantified by the American Independent Business Alliance. According to that organization, on average, 48 percent of the dollars spent at a local independent business was further re-circulated within the local community compared to only 14 percent of purchases made at the national chains? In other words, nearly half of the dollars customers spend in the business down the street from your business gets re-spent in other local businesses—likely even yours.
Additionally, Maria Contreras Sweet of the Small Business Administration (SBA) regularly talks about how two out of every three net new jobs are created in small businesses and roughly half of our friends and neighbors are employed by these businesses.
What’s more, small businesses like yours are those that support the local high school football team, the charity coat drives, and the local food pantry because they tend to be highly invested in the communities where they do business. Every summer I attend a car show that is sponsored by the local Kiwanis Club and the local business community. They use the proceeds from the event to buy coats and shoes for needy children in their area. This isn’t an isolated event either; nationally, local non-profit organizations receive on average 250 percent more support from local small businesses than they do from large national businesses. I believe this is because local businesses are more invested in the community.
This year, according to CNBC, “An estimated 112 million shoppers showed their support for Main Street on the seventh annual Small Business Saturday on Nov. 26, setting a new record for the event.” This is a 13 percent increase over last year.
Although it might not be realistic to expect customers to walk away from the big discounts of Black Friday or Cyber Monday to patronize local merchants—or even restaurants, it does make sense for small business owners to keep the ball rolling by patronizing the local businesses of their small business colleagues.
Did you see an uptick in business on Small Business Saturday?