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Local Editorials

OUR VIEW: 'Shop Small' movement more important than ever

Local small businesses, our biggest job creators, are under siege in Illinois

Today marks the 10th annual Small Business Saturday – a movement to get people into a “Shop Small” mindset and recognize the importance of supporting local retailers.

The event was started in 2010, in the middle of a deep recession. It picked up steam quickly, at a time when the allure of Black Friday was fading thanks to the big-box stores’ desire to spread the deals out over a longer time frame and consumers’ love of online shopping.

Since its inception, Shop Small Saturday spending has reached an estimated $103 billion – not bad for 9 days. By now most of us have seen this equation: for every dollar spent at a small business, about 67 cents stays in its community.

In addition to keeping more money at home, it’s become increasingly important to support the small businesses that are such a large part of our economic base. More than 77% of businesses in Illinois are small ventures that employ fewer than 50 people – a percentage that is well above the national average.

Although they have relatively small workforces, small businesses have been the main drivers of our state’s recovery from the recession, accounting for 61% of its job growth.

Now more than ever, it’s important to support our small businesses. Despite their job-creation numbers, last year was difficult for the state’s small enterprises. In 2018, business slowed, forcing more than 4,600 small businesses – almost 3% – to close.

It’s even more alarming to compare some of the small business numbers in Illinois with those of other states. Since the recession ended, the rest of the U.S. has created small businesses at more than double the rate of Illinois – 3.9% in Illinois compared with 8.3% in the rest of the nation.

In 2018, Illinois had the dubious distinction of being ranked the least friendly state for small businesses. Several things on the state political horizon could make it even more challenging for them going forward.

Tax policies always have a big impact on small businesses, and uncertainties about Gov. J.B. Pritzker’s proposed $3.4 billion progressive income tax increase are affecting business decisions, including hiring, wages and capital spending. The proposed hike in corporate incomes taxes would make Illinois third highest in the nation.

If higher income and property taxes, unemployment insurance and workers’ compensation costs aren’t enough to strangle business growth, small businesses have the minimum wage increases to worry about.

Until Springfield gets serious about keeping its spending in check and instituting real pension reforms that put a lid on the nation’s second highest property tax rate, trailing only New Jersey, things are likely to get worse.

As residents of Illinois, watching the state’s financial situation continue to deteriorate can be a helpless feeling. Many are fleeing the state, convinced it will never get better.

In the meantime, supporting our local small businesses is something we can control. One person deciding to shop in town for a day might not seem like much, but when the Shop Small mindset become instilled in a community, the impact is huge.

Local surveys done after the events show that foot traffic picks up in nearly 70% of the businesses that participate in Small Business Saturday. The holiday shopping season is critical for retailers. November and December business is expected to drive annual sales to the tune of 20% to 40%. Even more important, it creates momentum for the rest of the year. When shopping local becomes a habit, the impact is enormous.

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