According to a survey from email marketing company, Constant Contact, well over half of small businesses who had never participated in Small Business Saturday, planned to pass again this year. Why? There are myriad reasons small business aren’t jumping on the bandwagon. Here’s my take.
The concept of Small Business Saturday is great. No doubt about it. It raises awareness of the importance of small businesses to their communities. However, one day isn’t enough to give these courageous business owners the real boost they need and deserve. Shouldn’t our focus be on shopping locally 365 days a year.
Small Business Saturday originated in the marketing department of America Express and its advertising agency, Digitas. Kudos to them on hitting a home run — especially for their own marketing objectives. Here’s how the program makes money for AmEx. Consumers who register their American Express cards online and shop with one of the “participating” small businesses (those that accept American Express cards) receive a credit on their statements. This year the amount was $10. In previous years it has been $25. Many small businesses don’t accept American Express because the processing fees are too high.
Furthermore, of the 28 million small businesses in the U.S., 52 percent are home-based businesses according to statistics from the Small Business Administration. These businesses, most likely, don’t derive any benefit from the Small Business Saturday shopping spree. In 2012, holiday shoppers spent $579.5 billion, yet revenues attributed to Small Business Saturday accounted for less one percent of that volume — $5.5 billion. Not a very impressive return on investment after all the advertising dollars spent.
It’s American Express, not small businesses, that is the big winner when it comes to Small Business Saturday. Seems to me if AmEx really wanted to support small business, they could lower the processing fees for companies under a certain size. Instead of promoting its brand, why not put money in the pockets of small firms.
Small businesses are important to their local communities. Sage shared research with me that shows a 10 percent increase in spending with local businesses in San Francisco would add $192 million to the economy and create 1,300 jobs. Imagine if that scenario were to be replicated across the country. Additionally, money spent with small businesses stays in the community. For every $100 spent with a local business $68 remains in the local area as opposed to $43 spent with nonlocal businesses.
Last year, Sage North America’s management team drove an RV across the United States promoting the need to shop locally every day of the year. That’s the support small businesses need.
So as the hoopla from Small Business Saturday subsides, don’t lose site of the spirit of the initiative. Remember your friends and neighbors who own businesses in your community and make a commitment to spend your dollars locally — not just on one Saturday a year.
