Seasoned buyers have already laid out their retail battle plans. Once Thanksgiving obligations are fulfilled, the bravest of them will find a line to queue outside their favorite Big Box store to snag what they think are incredible deals. Black Friday – and increasingly Black Thursday night – has become the traditional gateway for holiday spending.
Black Friday, which falls on November 25 this year, is a godsend for major national traders. Electronics and appliances giant Best Buy expects sales of $51.8 billion in 2022, up 9.52% from sales of $47.3 billion in 2021. Discounter Walmart plans one in 2022 Revenue of $587.8 billion, up 3.83% from 2021 revenue of $559.2 billion. No wonder company heir Rob Walton earned $4.65 billion earlier this year dollars to buy NFL team Denver Broncos.
Online shoppers looking to avoid the queue are looking forward to November 28 – Cyber Monday – to capture deals electronically. That’s good news for Amazon, which expects sales of $485.9 billion in 2022, up 9.61% from 2021 sales of $461.8 billion. The company’s growth has made it possible for Amazon to hire 400,000 delivery drivers worldwide to operate its own fleet of vehicles, including 70 aircraft.
Between these shopping holidays is Nov. 26, Small Business Saturday, which encourages shoppers to support local economies by spending their shopping dollars at small local merchants, who in turn return their profits to the community. In the truest sense of the word, this is the most important shopping holiday ever.
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“We strongly believe that people shop locally,” said Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce. “Small businesses are inherently customer-centric, innovative and fragmented, and Milwaukee is well served by the small and medium-sized businesses that we have.”
The Milwaukee metro area has more than enough small manufacturing companies, says Sheehy, noting that only “Silicon Valley” in San Jose, California, has more manufacturers. While such firms are not favored on Small Business Saturday, they do bring significant economic strength to the region’s small business classes.
And Milwaukee’s small businesses tend to patronize one another, which Sheehy describes as “washing each other’s socks off.” The best small businesses, he says, can sell outside of the local market. “It puts more socks in the washing machine,” he adds.
It’s in the numbers
Some US federal government programs define small businesses as companies with 500 or fewer employees. Using this parameter, small business employment in the counties of Milwaukee, Ozaukee, Washington and Waukesha is home to 28,652 small businesses supporting 373,114 employees with a total payroll of $17.4 billion, according to US Census Bureau data. According to Sheehy, MMAC uses a parameter of 100 or fewer employees, which changes the numbers to 27,545 small businesses employing 246,143 people, supported by a $10.9 billion payroll.
The overall financial impact certainly doesn’t match Walmart’s performance, but it does illustrate the importance of small businesses, especially given that cash flow remains mostly local, Sheehy explains.
“Small companies have a symbiotic relationship,” he says. “The more you spend locally, the more products and services can be provided to the community. It creates a tighter supply chain and a healthier local economy.”
Small business owner Guy Rehorst agrees. As Founder and CEO of Great Lakes Distillery & Tasting Room, Rehorst holds the unique position of manufacturer, wholesaler, retailer and member of the hospitality industry for the unique line of spirits he manufactures and distributes from his Walker’s Point facility. Rehorst oversees 12 full-time employees (FTEs), making Great Lakes a very small company.
Both the pandemic and a volatile economy have taken their toll on the distiller, who managed to weather the storm thanks to the popularity of the 30 or so brands they produce, many of which have attracted their own followings.
“We compare our products to those of large companies, but in our case 90% of the dollars spent stays in the local market,” says Rehorst. “We source our ingredients locally. It starts at the farm level and includes the local trucker who brings the goods to the distillery. Financially, the local aspect is much more important than you think.”
It’s about community building
Social issues affect all small businesses, but they can have a more negative impact on minority-owned businesses, according to Marjorie Rucker, executive director of The Business Council, which helps black and brown-owned businesses learn how to access and work with supply chains cooperate larger companies. Rucker also chairs the Ethnic & Diverse Business Coalition, a consortium comprised of 14 different chambers of commerce and business coalitions across the state. The two groups together represent 1,800 small businesses nationwide employing 8,000 people, she says.
“The challenges that minority-owned businesses face are similar to most small businesses, and that means reaching potential customers,” explains Rucker. “But money from purchases only circulates within the black community for six hours before leaving. In other communities, money circulates much longer and has a greater positive financial impact.”
In some cases, the lack of money circulation has to do with business limitations, including lack of knowledge and/or capital, such as B. the lack of own buildings, she says. This can significantly affect the well-being and growth of the neighborhood in which the businesses are located.
“Small businesses are economic cornerstones of their communities and determine how those communities look, feel and function,” explains Rucker. “Determination, courage and persistence are what these companies need to survive, and our goal is to help them through whatever challenges they face, whatever they may be.”
The neighborhood aspect is critical for small businesses throughout the Milwaukee metropolitan area, and their impact should not be underestimated, says Eric Ness, district director of Wisconsin at the US Small Business Administration.
“Milwaukee, along with some of its suburbs, is a very neighborhood-focused city,” explains Ness. “Each area has its own character, allowing people to visit a different neighborhood and have a completely different shopping, dining and entertainment experience than they might have closer to home.”
The same businesses are run by neighbors who in turn patronize other small businesses that circulate the money locally for the good of the community. Many small businesses have disappeared during the pandemic, underscoring the need to support them not just on November 26, but every day of the year, Ness says.
Rucker of the Business Council agrees: “Small Business Saturday is really important. If you shop on Black Friday, look at your list and save at least 50% on your Small Business Saturday purchases.”