PHOENIX - In a world where people often turn to big-box retailers for their needs (or wants), there has been a push in recent years for consumers to turn to small businesses for at least some of those needs or wants in the aftermath of Thanksgiving.
Here's what you should know about that push, also known as Small Business Saturday.
What is Small Business Saturday?
According to American Express's website, Small Business Saturday was created in 2010, amid the Great Recession, as a way to encourage people to bring more holiday shopping to small businesses.
What is considered to be a small business?
According to the U.S. Small Business Administration website, a small business is defined by size, either in terms of their average number of employees over a period of 12 months, or their annual receipts over a three-year period.
The SBA also publishes a business size standard table on what business is considered a small business in their respective industries.
Other factors that define a small business, according to the SBA, include:
- An business that is organized for profit
- Has a U.S. place of business
- Operates primarily within the U.S., or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor
- Independently owned and operated
- Not dominant in its field, or on a national basis.
Are people "shopping small"?
To a certain degree, yes.
According to the National Retail Federation, 51 million shoppers took part in Small Business Saturday in 2021.
What's the impact of small businesses on the U.S. economy?
According to the Small Business Administration, there area 33.2 million small businesses currently in operation across the country.
These small businesses, according to SBA officials, generated 12.9 million net new jobs over the past 25 years, accounting for two out of every three jobs that have been added to the economy.
"We do know that there is a huge shift on how people are thinking about how they spend their money in the past 20 years," said Thomas Barr with Local First Arizona. "In the work that we have been doing at Local First Arizona, we've seen thousands of small business open, and thousands of Arizonans say ‘I want to support these businesses.’"
Shopping at a small business could also mean shopping at a business that is locally owned. According to statistics, for every dollar spent at a locally-owned business, about 70 cents stay local. That is higher than the ratio for national businesses, where only 40 cents stay local for every dollar spent.
What are some of the issues small businesses deal with?
According to a September 2022 article by the Associated Press, an inflation surge that the country is currently experiencing is costing small businesses money and customers, with some customers opting for alternatives or delaying purchases altogether.
"If (customers) can get it for a dollar for not that notable of a difference, they’re going next door," said Kymme Williams-Davis, who owns a cafe in Brooklyn, New York.
"What we sort of see is people maybe buying a $50 gift dropping down to $35, and the whole lower tier aren’t even buying at all," said Kim Shanahan, who sells gift baskets and care packages online. "They don’t have the discretionary funds."
"Right now, small businesses are dealing with the same issues that all businesses are dealing with, which is the high cost of doing businesses right now, and also hiring and retaining good people to work for them," said Barr.
How does Small Business Saturday help small businesses?
According to the SBA, spending at independent retailers and restaurants on Small Business Saturday reached an estimated $23.3 billion in 2021.
Where can I go to shop for Small Business Saturday?
There are various resources on where you can shop and support small businesses during Small Business Saturday.
Shop Local First - Local First Arizona
The Associated Press (AP) contributed to this report