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By: Gregory Huysman

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2020-11-27

Support Local Businesses During COVID-19 on Small Business Saturday

Local Investing

This Saturday, November 28, is Small Business Saturday. Started in response to the Great Recession, the annual event invites communities to buy from small, local businesses on the Saturday after Thanksgiving.

Ten years later, our local business owners are facing an even greater challenge. As of August 2020, 163,735 United States businesses listed on Yelp were reported as closed, with 97,966 reported as permanently closed due to the pandemic. If there was ever a time to participate in Small Business Saturday, the time is now.

Many of us are looking forward to a return to normalcy once the pandemic is over. Unfortunately, if consumers do not continue to support small business right now, many of our long-time, local favorites will not survive. This is the perfect year to start your holiday shopping on Saturday and support our wonderful small businesses as much as possible during the holiday season!

But how can we support our local businesses if they have limited hours, limited capacity, or are temporarily closed? The easy answer is gift cards or gift certificates. These purchases give the business owner a desperately needed injection of working capital; it is “free” money that allows the owner to pay for current expenses so they can continue to operate. When the person you give it to redeems the gift card, it only costs the owner the goods you are buying. Many local businesses have adopted gift cards if they had not utilized them before, so be sure to check in with your local favorites to see what your options are.

Use credit and save money this holiday season.

 

Although it can be easy and convenient to turn to online shopping sites such as Amazon, many local businesses have expanded their online presence in direct response to the pandemic. While it can be more expensive, shopping locally has two main benefits. Generally speaking, local products are of a higher quality, so your purchase will last longer. Second, if you have the means to spend a little more for local goods, it will ultimately benefit you and your neighbors. If everyone took two items from their shopping list to purchase locally, it would make a big difference. A little goes a long way.

How does buying locally benefit your community? Not only does participating in Small Business Saturday throw a lifeline to our businesses, it also has a profound effect on the local economy. Studies have shown that only about 14% of the revenue generated at a national retail chain is recirculated in the local or state economy. By contrast, local independent retailers recirculate 48% of their entire revenues. The numbers for the restaurant industry are even more striking: national chains recirculate 30% of all revenue, while local restaurants put 65% back into the economy! If every family in the United States spent just ten dollars each month locally instead of at a big box store or national chain, over $9.3 billion would be directly returned to local economies.

This recirculation has a ripple effect. Not only does it increase and stabilize the income for the employees of the businesses you buy from, but it also supports a long list of local vendors that the business relies on for goods and services, vendors which in turn pay their employees. All of this local economic activity increases the local and state tax base, which helps stabilize Vermont communities and further encourages greater job opportunities and higher paying jobs. Our schools, fire departments, hospitals, and other vital community resources also depend on a strong and steady tax base. What’s more, small local business contributed more often (and at a higher level) to local nonprofits and community causes. They truly are pillars of our communities!


SHOPPING LOCALLY FOR THE HOLIDAYS?
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Beyond the economic benefits, participating in Small Business Saturday can also align well with your values. Where you spend your money is a great way to show what you value, whether it’s supporting young entrepreneurs, buying from minority-, women- or veteran-owned businesses, or decreasing the environmental impact of your holiday shopping. Goods and services produced and sold locally will always have a much smaller carbon footprint than goods being flown in and trucked around from other parts of the country, or even the globe. When residents can walk or bike to make daily purchases, the positive environmental impacts are obvious.

Even if you don’t have your holiday gift list ready this week, use Small Business Saturday as inspiration to make conscious spending decisions this holiday season. You will be contributing to community sustainability in the short run by helping businesses make it through the current pandemic and supporting the foundation for long-term business growth in Vermont in the future.

 

OTHER ARTICLES YOU MAY ENJOY:

Local Deals for Your Black Friday and Cyber Monday Holiday Shopping

Holiday Shopping Online? Here’s How to Protect Against Cybercrime

How to Use Your Credit Card for Holiday Shopping

 

The views and opinions expressed in this blog are those of the authors and do not necessarily reflect those of VSECU.

About Gregory Huysman

Gregory Huysman is the director of business lending at VSECU. He has worked in banking and small business lending for 25 years after graduating from Saint Michael's College. A New Jersey native, he lives in South Burlington as a weekend chef and father of two grown daughters.