Small business owners across the U.S. are gearing up for what they hope will be a highly profitable holiday season, buoyed by enthusiastic consumer spending and robust government investment.
The nearly 32 million small businesses that form the backbone of local economies have Small Business Saturday to look forward to on November 26th. The shopping day was created by American Express in 2010 to encourage holiday shoppers to support small, independent, and minority-owned businesses.
This year, the credit card giant’s survey of small business owners found that “55% anticipate Small Business Saturday will make a significant contribution to their overall holiday sales.” Meanwhile, 50% of consumers surveyed said they plan to participate, and 85% expect to shop small this season.
$18 Billion Spent on Small Business Saturday Last Year
Over the past 13 years since its inception, American Express says consumers have reported spending nearly $184 billion cumulatively on Small Business Saturday.
Last year alone, the campaign drove an estimated $18 billion in consumer spending at local small businesses and restaurants on the Saturday after Thanksgiving.
In a post-Small Business Saturday survey in 2021, 72% of shoppers said the initiative made them want to support independent retailers and eateries all year round.
For many local business owners like Donnell Johns, who runs Veterans Growing America supporting veteran and military spouse entrepreneurs, Small Business Saturday creates valuable awareness.
“We’ve definitely seen an increase in the amount of people who come out and support small businesses over the last several years,” Johns said.
Holiday Sales Jump 10% On Average
Ken Moorman, founder of Jirani Coffeehouse in Manassas, Virginia has seen a real sales boost from Small Business Saturday over the years.
“Prior to Covid, it was huge, and it started to pick back up last year,” Moorman said. “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.”
Moorman expects to see even more participation and consumer spending this Small Business Saturday. For his coffee shop, the annual event drives an average 10% increase in sales compared to a typical Saturday.
Federal Support Fuels Small Business Boom
The high hopes local business owners have for the 2022 holiday shopping season come on the back of robust federal investment in the small business sector under the Biden administration.
On Tuesday, the Small Business Administration (SBA) announced it has delivered nearly $50 billion in financing support to American small businesses in fiscal year 2023.
The SBA helps provide critical access to capital that many small business owners have historically struggled to obtain affordably. Funding enables entrepreneurs to grow their ventures and boost job creation.
Most of the federal small business backing came through the SBA’s core 7(a) small business lending program. In fiscal 2023, the agency reported guaranteeing over $27.5 billion in 7(a) loans – an all-time record.
57,300 Businesses Supported With $5 Million Loans
In total, the SBA backed more than 57,300 7(a) loans up to a maximum of $5 million per business this past fiscal year. That’s well above pre-pandemic lending levels, indicating the small business sector is rebounding strongly.
“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,” said SBA Administrator Isabel Casillas Guzman.
The Biden administration has prioritized reforms and addressing persistent unequal access to growth financing so all types of small business owners can thrive, Guzman explained.
As part of that mission, the SBA has significantly increased backing for minority and other underserved groups this past fiscal year.
Federal Support Doubles for Black-Owned Businesses
Both the number and total dollar value of SBA-guaranteed loans going to Black-owned businesses have doubled under President Biden, the agency’s new data shows.
In fiscal 2023, the SBA insured 4,700 loans worth a combined $1.5 billion to African-American-owned enterprises. That comes on top of 7,700 loans to Latino-run small businesses, 7,500 loans to Asian-American and Pacific Islander-owned ventures, and 500 loans to indigenous American-operated companies.
The SBA also provided critical support to the tune of $5 billion in loans for women-owned businesses and $1.2 billion for veteran-owned small firms over the past year.
Small Business Owners Eye Bigger Slice of Holiday Pie
With consumers projected to spend robustly this holiday shopping season amid a still-strong broader economy, small business owners like coffee shop founder Ken Moorman are hoping their unique local ventures can capture a bigger slice of the pie.
Events like Small Business Saturday definitely help raise awareness and drive foot traffic. But the Biden administration’s historic federal investments in entrepreneurs across the spectrum has lent real momentum.
Minority-owned businesses in particular have new fuel and financing to take their ventures to the next level. So when consumers opt to “shop small” at their local stores this holiday season, they’ll likely find minority entrepreneurs represented like never before.
That diversity of options stands to benefit holiday shoppers and boost local economies at the grassroots level – both this Small Business Saturday and all year round.