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Thursday February 29, 2024

Why Small Business Saturday sits right with consumers over high-end Black Friday?

US consumers have reported spending close to $184 billion on Small Business Saturday during the previous 13 years

By Web Desk
November 25, 2023
People buying from a small business shop in the US. — Unsplash/File
People buying from a small business shop in the US. — Unsplash/File

The less celebrated Small Business Saturday aims to maintain its winning run for the almost 32 million small companies on a tide of eager consumer spending and substantial government support, while retail giants like Amazon and Walmart anticipate hefty profits from Black Friday.

"55% anticipate Small Business Saturday will make a significant contribution to their overall holiday sales this year," according to a recent American Express study of small company owners. In an October consumer study, half of participants indicated they would want to take part in Small Business Saturday, and eighty-five percent said they would like to purchase small this Christmas season.

According to the corporation, customers have reported spending close to $184 billion on Small Business Saturday during the previous 13 years. Following Small Business Saturday in 2018, 72% of consumers responded to an American Express study stating that the campaign encouraged them to dine and buy at small, independent businesses all year long. According to American Express, last year's Small Business Saturday helped consumers spend close to $18 billion.

Small Business Saturday is important, according to Donnell Johns, the founder of Veterans Growing America, an organisation that promotes small companies owned by veterans and military spouses. This is because it raises awareness of the need of purchasing small.

“We’ve definitely seen an increase in the amount of people who come out and support small businesses over the last several years,” he said.

For Ken Moorman, the creator of Manassas, Virginia's Jirani Coffeehouse, Small Business Saturday signifies an average 10% increase in sales compared to a regular Saturday.

“Prior to Covid, (Small Business Saturday) was huge, and it started to pick back up last year,” Moorman said, adding that he expects even more participation this year. “We all know small businesses are the heartbeat of America. One time of the year, it’s great to remind everybody: Don’t forget the little guy.”

In an effort to encourage Christmas consumers to support small businesses in their communities, American Express launched the Small Business Saturday campaign in 2010. 

It has evolved into a mom-and-pop equivalent of Black Friday, which is frequently controlled by enormous national and international companies. Since 2011, the Small Business Administration has co-sponsored the programme. 

According to recent federal data, small independent enterprises are expected to benefit greatly from the holiday this year.

“American Express has been a long-time advocate for small businesses – we work to deeply understand them and meet their evolving needs. We also understand the impact shopping small has on supporting local communities through our annual Small Business Saturday and year-round Shop Small campaigns,” Elizabeth Rutledge, American Express’ chief marketing officer, said in a news release last week. “We hope Small Business Saturday and this year’s interactive experience excite and engage shoppers across the country during the kickoff to the important holiday shopping season.”

The SBA said in a press statement on Tuesday that it has committed about $50 billion in fiscal year 2023 to helping small companies in the United States. 

According to the SBA, it contributed $27.5 billion in 7(a) loans, which are its main lending programme. Over 57,300 7(a) loans in total, each with a limit of $5 million, were secured by the SBA. The fact that 7(a) loans have risen beyond pre-pandemic levels suggests that the relatively susceptible small company sector is beginning to recover.

“Starting and running a business takes tremendous grit and determination, but it also takes capital — something too many enterprising Americans have historically been unable to obtain equitably and affordably,” SBA Administrator Isabel Casillas Guzman said Tuesday in a statement. 

“The Biden-Harris Administration remains committed to simplifying and addressing persistent inequities in accessing capital to ensure all small business owners can get the funding needed to grow and create jobs for our economy … As we build on our progress, the SBA will continue to prioritise reforms that will help level the playing field to further the small business boom fostered by Bidenomics.”

Additionally, the SBA reported that it made progress in assisting small companies owned by minorities this past year.

The amount and value of loans made to Black-owned firms have increased by double under the Biden administration, according to recently released federal data. 

The SBA insured 4,700 of these loans, for a total of $1.5 billion, in just the fiscal year 2023. This is on top of the 7,700 loans given to Latino-owned small businesses, 7,500 loans given to Asian American and Pacific Islander-owned small businesses, and 500 loans given to Native American-owned small businesses.

Additionally, the SBA supported loans totaling $1.2 billion for veteran-owned businesses and $5 billion for women-owned enterprises.