How well do you know your local mom-and-pop businesses? You may know them pretty well without even realizing it. Small family-owned businesses make up 99.9 percent of companies in the US, according to Small Biz Trends.
Owning a small business is a dream for many people, and it’s easy to see why – being your own boss and setting your working standards is appealing. However, 2023 was a challenging year for many small businesses, and many business owners are concerned about the mom-and-pop shop’s future.
This National Mom & Pop Business Owners Day, we’re breaking down what makes a small business so unique, how they help the economy, and how you can support the small businesses around you.
What Makes Mom-and-Pop Shops Great
Family-owned businesses have long been considered the backbone of America. For many people, not being beholden to a boss and signing their own paycheck is a dream. However, small businesses aren’t just there to help the dreamers – they encourage competition and prevent monopolies, which means that the consumer ends up paying less, and the economy continues to move on.
Small Businesses Boost Economies
Mom-and-pop businesses can shape the economy at both ends. In a recent article in Seattle Business Magazine, they wrote: “Family-owned businesses across the country have been stepping up for generations. At 5.5 million strong in the United States, family-owned businesses are generating 57% of US GDP and collectively employing 63% of the workforce. In fact, 75% of all new jobs are generated by family businesses.”
How have small businesses managed to become such a vital part of our economy? They’re in it for the long haul, making them resilient in volatile economies and more likely to retain their employees.
Small Businesses Help Communities
According to Fundera, 50 percent of small businesses are home-based. That’s right – odds are, your favorite small business is right in your hometown. Small businesses promote communities. You’re more likely to shop from a store if you know who owns it, and if a small business does well, it has the potential to become a tourist attraction. That restaurant you’re thinking of starting? Well, if you make a name for yourself, people could travel for miles around to try your wares.
Small Businesses Offer Authenticity
There’s something special and unique about purchasing an item and knowing that the person you bought the item from can tell you exactly where they got the idea for the product, how they made it, and why they hope you enjoy it so much. It’s a unique edge that a mom-and-pop shop has that you can’t find anywhere else – and it’s something that consumers enjoy. It goes hand in hand with the rise of influencer culture – people want to mimic what they see online and be like the people they admire. A mom-and-pop shop allows consumers to get to know business owners personally, and to admire their work every step of the way – not just at the end product. American Sign Company offers a discount on this day to help celebrate.
A Note on Franchises
Not all small businesses look like the typical corner-store mom-and-pop shop. Franchises (independent offshoots of popular companies that open in separate locations) have played a significant role in boosting the American economy over the years. Normally when we think of franchises, we think of restaurants like McDonald’s, but many other businesses have franchised their models – commercial cleanup and restoration service SERVPRO has locations throughout the United States, and masseuse chain Massage Envy can be found all over America. They are a safer bet for people looking to dip their toe into the small business pond without taking on too much risk.
According to recent data from Franchise Direct, one in seven American businesses is a franchise, and now, there are close to 3,500 franchised brands in the US. The benefits of franchises are easy to see – according to Franchise Direct, franchises offer potential business owners the help of a recognizable name, logo and service. Essentially, they save franchise owners the arduous work of building a positive reputation for their brand and can offer franchise owners help with industry data and marketing materials. The long and short of it? Franchises allow companies with a proven business plan to expand into other regions and first-time business owners to start the competition with a proven business model.
While the benefits of small businesses are well documented, COVID-19 has made a challenging industry even harder. A recent Forbes article that three in four small business owners are concerned about the pandemic’s economic impact. Many of these businesses have also seen a reduction in consumer demand, and 38 percent of those businesses aren’t confident in their financial future.
How can you help the small businesses in your area? There are plenty of ways that you can help keep your shops local – some of them without spending a dime. Consider the following tips:
- Volunteer: Do you have a specific skill set you’d like to share with the small businesses around you? Approach them and ask if they need help in this area.
- Social media: Like and share their posts on social media. Just because you aren’t buying their products doesn’t mean that someone you know won’t, so make sure to hit that ‘share’ button!
- Choose credits over refunds: Not happy with your product? Instead of returning your purchase for a cash refund, why not choose a store credit? Store credit allows businesses to keep the money that you’ve already spent, and you’ll still be able to exchange the credit for products.
- Buy credits or gift cards: Another way to support businesses, especially ones that are closed or whose services you can’t use until the pandemic is over, is to purchase gift cards. This gives the company money, which can hold them over until they can operate as usual, and allows the recipient to use the credit when they can!
- Order more takeout: The best way to support restaurants during this pandemic is simple – order more takeout and delivery options! If you can, try to buy from restaurants directly. Many third-party services take a significant transaction fee (some up to 30%), which means businesses still struggle to profit.
Small businesses and franchises are what make up the American dream – and it’s so important to support the local businesses in your community today and every day.