Independent businesses are obviously a huge part of the fabric of our community in Emporia. For years, stagnation and low occupancy rates crippled the downtown area, but as focus has turned away (not quite completely) from big box stores and looked more favorably on small mom and pop shops, independent businesses have seen a sort of renaissance – business is healthy and on an upward trend. If you, as a small businesses owner or independent retailer, have ever wondered what the climate is like for others as a point of comparison, the Advocates for Independent Business and the Institute for Local Self-Reliance have teamed up for an annual report on the “state of the state” of local retail. The reports includes information from over 3,200 independent businesses, detailing both triumphs and challenges entrepreneurs faced in 2015. Below are the highlights of their findings.
1. Employment is on the rise for local retailers. In 2015 there was an average expansion of employment at almost 6%, “with more than 30 percent of respondents reporting the addition of at least one new employee.” This means quality goods and services from small businesses are in demand- enough so that expansion is required to meet that market demand. This comes as a bit of a surprise to most, as many expected stagnation due to increasing health care costs that could burden small businesses.
2. Cities with active “Shop Local” movements are reporting a strong correlation between that movement and increased profits. In fact, almost 70% of survey respondents with a strong “Buy Local” presence directly contribute a portion of the successes of their business to this collective mindset. Forty percent of these same respondents cite a higher collaborative and mutually beneficial working relationship with other retailers as a result of this same movement. We see this on a regular basis in Emporia, with many merchants striving for collaborative successes. Expect to see the significance of this effort magnified and expanded in 2016!
3. “One in three independent businesses that applied for a bank loan in the last two years failed to secure one.” While the reasons aren’t specified, it’s a troubling factor nonetheless. Emporia Main Street works hard to provide a handful of alternative financing options for entrepreneurs, as we also see this challenge as a significant one. Included in that data set, 54% of minority businesses owners and 41% of newer businesses had trouble securing financing via traditional bank loans. That’s why programs like Kansas Department of Commerce’s Incentive Without Walls program are so vital to the success of small businesses looking to develop their concept or expand said businesses.
4. Sales were up for independent retailers in 2015, by an average of almost 5%. The holidays were especially generous for small businesses last year, seeing a sales increase of about 3%. These numbers are in stark contrast to many big box retailers who saw their fair share of struggles in 2015, especially in the fourth quarter. Speaking with several businesses owners downtown, Main Street Staff found nearly all were positive about their holiday sales experience this past year!
5. Internet retailers remain one of the biggest challenges for small, independent businesses, with over 70% of survey respondents indicating internet retailers as their number one challenge. While attention toward big box stores may be altering, the proliferation and ease of use for online retailers remains a constant source of concern for mom and pop shops. Other important challenges noted by independent businesses include rising costs for both health care and commercial property.