WASHINGTON—Small businesses make up 99.9 percent of U.S. businesses and employ almost half of all U.S. workers. But they’re struggling to compete with their bigger counterparts—for sales, jobs, and real estate.
Nine years ago, Small Business Saturday was created to promote small, mostly local, businesses that don’t get the attention big box stores do on Black Friday, the day after Thanksgiving when many stores offer double-digit discounts.
The day was started in 2010 for the more than 30.2 million small businesses to help them get back on their feet after the 2008 housing crisis, according to the U.S. Small Business Administration.
It wasn’t started by a small business, though. American Express, which Forbes placed 28th in its list of most valuable brands, started the now annual sale day. In smart business fashion, it has also trademarked it.
American Express estimates the event has generated $85 billion for small businesses since its inception. Last year alone, $12 billion was spent at independent neighborhood retailers and restaurants, estimates the Small Business Administration.
This year, New Mexico has gone a step further with the day by passing a law exempting businesses with 10 employees or fewer from paying taxes on a number of goods, as long as the purchase does not go above $500.
The day doesn’t just promote local businesses, though. E-commerce site Etsy, which specializes in handmade and vintage goods, is hosting pop-up markets in 13 cities in eight states and the District of Columbia on Nov. 24. Some of its online retailers are also observing the day by offering discounts through their Etsy stores.
William Jones, the owner of Allegory Gallery in Ligonier, Pennsylvania, told the Tribune-Review that all the marketing for the day has paid off.
“Last year, we saw almost a tenfold jump in business on one day over the prior year,” he said. “And the previous year was up already.”
This could be in part due to a surge in consumer spending that pushed the GDP growth rate up to almost 4.2 percent in the second quarter this year, the highest since 2014.
But for small businesses, the rapid growth also presents a challenge, according to Linda McMahon, the head of the U.S. Small Business Administration (SBA).