When we consider all the ways that small businesses contribute to our society, many things come to mind. In addition to helping our friends and family prosper, small businesses create important jobs and fill the world with one-of-a-kind goods and services. But in a world dominated by online retail giants and one-click purchase buttons, being a small business isn’t easy – especially during the holiday season.
Small Business Saturday was started by American Express in 2010 as a followup to National Entrepreneurship Day which was established by Grasshopper co-founders David Hauser and Siamak Taghaddos. The annual event is held one day after Black Friday each year, encouraging consumers to choose small businesses over large commercial chains. In turn, the day helps bring increased business and recognition to our country’s entrepreneurs.
Since the day was first founded, the landscape in which we work has changed dramatically. Digital tools, remote work accessibility, and improved workplace equality have stirred more opportunities for entrepreneurship and small business development.
Here’s a closer look at the trends and changes shaping the small business climate – and why Small Business Saturday is more important than ever.
Small Businesses and the Economy
In 2016, Small Business Saturday reached record sales numbers. According to an American Express report, 112 million consumers shopped at a small business on the day last year. In addition, 81% of people who bought from a local business on Small Businesses Saturday encouraged friends and family members to do the same.
Many people choose to shop small because they know it will support their local economy. But how much of an impact does it actually have? For every $100 spent at a small business, about $70 stays within the local economy, according to the Federal Reserve Bank of Atlanta. When that same amount is spent at a business that isn’t locally owned, only $43 stays in nearby communities.
Small businesses have always helped foster economic growth on a small scale. However, their increasingly positive impact on the national economy shouldn’t be overlooked. According to the U.S. Bureau of Labor Statistics, a primary source on new businesses and job creation, the number of new businesses created in America has steadily increased since 2010.
A Positive Trend
Small business owners are also becoming more positive about economic development and financial success. As demonstrated by an October 2017 report by the National Federation of Independent Business (NFIB), 14% of small businesses reported increasing employment opportunities at an average rate of 3.5 workers. Meanwhile, 35% of all business owners “reported job openings they could not fill in the current period,” which marks the highest rate of unfilled jobs since November, 2001. This same optimism was echoed in Intuit’s 2016 Future of Small Business Report, where 35% of small business respondents said they expect more than a 5% increase in revenue in the coming year. Will the success and optimism remain steady? The report says yes. Intuit’s projections see the number of small businesses skyrocketing to over 42 million in 2026 – an increase of ten million businesses in one decade alone.
Most people understand the positive impacts of shopping local. However, this doesn’t change the fact that it’s often faster and more cost effective to buy from an e-commerce giant.
Despite the immediate convenience that large stores can provide, it’s important to remember this: shopping local has a direct impact on the cultural and social well-being of your community. In fact, the Seattle Good Business Network points out that small businesses donate 250% more than larger businesses to nonprofits and community causes. Whether that’s donating volunteer time to a local homeless shelter, or supporting a school softball team, small businesses are personally invested in the health and wealth of their communities.
Herein lies one of the greatest benefits of supporting small business: authenticity. Small business owners understand their customers on a deeply personal level, and they put their heart and soul into making their friends and neighbors satisfied. As a self-employed freelancer who comes from a family of entrepreneurs, this truth lies close to my heart. And when I shop small, I know that I am supporting someone else’s mom, aunt, uncle, cousin, or friend. Choosing small businesses over large corporations is not always an easy decision, but it has lasting impacts that benefit my quality of life.
From the food we eat to the services we rely on, small businesses are woven into the fabric of our everyday lives. Small Business Saturday provides an opportunity to recognize the contributions of these companies, and do our part to bolster economies at the local and national level.