Many Americans showed their support for Main Street businesses by purchasing holiday gifts on Small Business Saturday and Cyber Monday from local stores in their communities. A whopping 75% of consumers reported they were planning to “shop small” this holiday season, according to one recent survey.
That’s a good sign—and hopefully the sales tallies for this year’s event will bring us more positive news—but the fight to save America’s small businesses far from over. We need to make every Saturday from now until the end of the holiday season Small Business Saturday to help many of the small businesses in our community make it to 2021.
The situation is dire for our local downtowns otherwise. Forty-six percent of U.S. small businesses said consumer spending must return to pre-COVID levels by the end of 2020 for them to be able to stay in business, according to American Express research in late October and early November.
Even with new vaccines offering hope, many Main Street businesses will be struggling to make up for their losses for years. Among larger small businesses and midsize businesses, 46% said they expect it to take one to three years to recover from the crisis, and 25% expect it to take three or more years, according to American Express Research conducted in October.
Against this backdrop, we are already seeing a dramatic loss of businesses owned by people of color. Between February and April alone, 440,000 Black-owned businesses in the U.S.—41% of the total of 1.1 million—closed according to the National Bureau of Economic Research. In contrast, 17% of white-owned businesses closed in the same period.
Many of these businesses had nowhere to turn for the capital to see them through the pandemic. Most small businesses operate on budgets matching the average American family – with little to no emergency funds. The majority are bootstrapped, relying on sweat equity, and have limited access to emergency capital outside of the owner’s personal retirement savings or home equity lines of credit.
Black-owned businesses are particularly vulnerable because they are less likely to get approved for bank loans; 53.4% of those who apply get turned down, compared to 24.7% of white-owned firms, according to the Federal Reserve.
So how can you help? One of the simplest ways, when you buy gifts to celebrate Christmas, Hanukkah, Kwanza or Festivas, is to commit to buying a set percentage of your gifts locally. With the average American planning to spend $852 on gifts this year, even devoting a quarter of the total can make a difference.
Many local merchants now have websites where you can browse their merchandise and make purchases from home for delivery or pickup, if you’re hesitant to shop inside of a local store as coronavirus cases spike. Your local hardware store is the perfect place to shop for the do-it-yourselfers on your list. Independent bookstore staffs often provide personalized service to help you choose the right books for the readers on your list, and for practical types, who would turn down a prepaid oil change at the neighborhood garage?
Even if your holiday entertaining is limited to your immediate family this year, buy your brisket, turkey or ham from a local butcher shop. Look to a local distillery or brewery for your spirits or craft beers.
Collective Action Works
At the same time, if others ask you for your gift list this year, point them to the local stores where you want people to shop. This will help support your favorite fashion boutiques or restaurants that offer gift cards.
The impact of our concerted efforts can potentially be huge. In 2019, consumers spent $19.6 billion at independent retailers on Small Business Saturday. A cumulative total of $120 billion had been spent on Small Business Saturday since its start in 2010 by last year.
Every purchase helps to keep dollars in your local community. For every $100 you spend at local businesses, $68 stays in the local area, according to Amy Hartzler with the nonprofit Business Alliance for Local Living Economies. This results in tax revenue that helps pay for teachers and firefighters, local parks and roads, schools and other infrastructure. Independent retailers return more than twice the amount that chains reinvest locally.
The Surge Comes At A Critical Season For Small Business
We are entering the pandemic’s third wave. Unlike the surges in spring and summer, the spikes are no longer localized. Every community is impacted, with tens of thousands of new cases reported daily nationwide. Here in St. Louis, where I am based, the County Department of Public Health is reporting an average of 119 new cases a day, with 1,004 people hospitalized, for the week ending November 27. Seeking to curb the spread and relieve pressure on hospitals, local lawmakers have adopted new restrictions, including an indoor dining ban and business capacity reduction from 50% to 25% in St. Louis County. This contraction coincides with the most critical time for consumer spending, when many Main Street businesses start to turn a profit for the year.
Local businesses count on our patronage to stay afloat. Every customer and each transaction are precious to them. When deciding where to spend your dollars this season, keep turning to local, independently owned businesses within your local community.
None of us wants to wake up one day and find there’s no place to get a cup of coffee, enjoy a restaurant meal or buy a gift in our local downtown. Fortunately, there’s a lot we can do to save them.
This story and others on Times of E are made possible by a sponsorship from the Ewing Marion Kauffman Foundation. The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that provides access to opportunities that help people achieve financial stability, upward mobility, and economic prosperity – regardless of race, gender, or geography. The Kansas City, Mo.-based foundation uses its grantmaking, research, programs, and initiatives to support the start and growth of new businesses, a more prepared workforce, and stronger communities. For more information, visit www.kauffman.org and connect with www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.