Is the American Dream on the Verge of Extinction?
Unlikely.
But it’s a question we do need to ask.
In fact, there have been many times over the past 8 months where it has felt like sectors of the small business economy should be placed on the endangered species list.
Many of these sectors are still literally fighting for survival.
Even if you count yourself as one of the more fortunate business owners who's been able to navigate through these challenging times, now’s the time to realize we’re a long way from through this crisis.
Here’s what we learned in this month’s research:
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Consumer purchasing shifted dramatically due to COVID-19.
- 45% of consumers polled shifted away from local businesses and to major online providers (Amazon / Walmart).
- Concerns over personal safety (37%) drove the shift.
- No meaningful shift back has occurred and 52% do not anticipate it happening in 2020.
- COVID case numbers are on the rise, making it even more difficult to alleviate consumer concerns.
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Closure rates for businesses could top 42% by the end of 2020.
- Consumer businesses will bear the brunt of closures at 45%.
- Many other businesses depend on these businesses and 38% anticipate they will close, too.
- 40% of consumer businesses are experiencing challenges in their supply chain.
The small business economy represents 45% of GDP and 65% of new job creation. It typically leads the overall economy out of economic recessions. And when you look at the data, much of it is on life support.
So what can be done?
Washington Must Step Up
We need to raise our voices to our representatives in Washington and let them know:
- They need to support further relief.
- This time, they need to ensure the businesses most impacted by this crisis get the money they deserve.
- They need to cut the major money center banks who served themselves over their small business customers in the last go round out of the equation.
Here’s where you can go to find and reach out to your representatives.
And We Need to Step Up, Too
We need to recognize we are part of the problem and the greater part of the solution. Where we spend our money matters.
If you spend $100 at a local business, roughly 50% of what you spend gets re-circulated within the community when that business pays its employees, local suppliers, and supports the local community. In contrast, the same $100 spent at a major online retail business all leaves town forever.
If we want our local economies to recover we need to shift our spending back to locally-owned businesses to the greatest extent possible and encourage others to do the same.
Comments (1-10)
Just a note- there is a lot of negative energy around, some times sadness and heaviness...It is a good idea to remove that energy and make positive changes/ Things are changing so quickly everywhere- we need to change how we accept things in a positive way..smiling is helpful and being kind to others can make a difference- and more ideas that help..I have. positive energy is ery important to balance the field..
Eric! Your article has tremendous potential in helping people engage in the effort to be supportive! Supporting the local businesses is a great idea yet many of them had to shift how they can accommodate those wanting/needing their service.
The online giants have their delivery systems already in place. It’s the smaller businesses and depending on what kind of business that needs the help in figuring out another way to deliver. Unfortunately that takes more of their time to scramble to survive.
Now is the time to assess the challenges that stopped them from delivering and innovate a new way. The pandemic is showing all of us new ways of conducting business. It’s preparing us for a way to honor tradition and embrace innovation.
Today is the glimpse of the vision of what we can do to engage in a new dream! Perhaps the dream of America is continuing to work out the kinks. Embracing the beautiful cultures that are all encompassing, each affecting the other, blending in unity, meshing in love.
Keep your push alive! I love it!
Thoughtful article, Eric. Thank you. The American dream is still alive but will likely be undergoing a seismic shift similar to the industrial revolution in my opinion. My experiences in 2020 as an intellectual property/business law attorney have demonstrated that the entrepreneurial spirit is still very real as folks are coming up with innovations and starting businesses to address today's problems from COVID19 challenges to the environment/climate change to coming up with re-imagined restaurant services. I would also emphasize that there will continue to be well-paying jobs in the trades for plumbers, facility maintenance workers (e.g., like those essential for keeping our hospitals going), electricians, AC repairers, mechanics, etc. - essential local service providers that nobody thinks about until they need one. These are difficult times ==> reducing our individual exposure to COVID19 while also trying to support our local businesses as we did before.
The American Dream may be under pressure in the midst of this unprecedented event, but is not on the verge of extinction. The dream is alive and well. As small businesses owners, we have to reinvent, innovate and rebuild. That is what we do. Although we are down, this is temporary and we will get past it.
The American Dream, by the way, is the universal dream of all people. It has always been best achievable in America. This has also not changed.
I agree that we have to support local business and community organizations during the dramatic shift brought on by COVID-19. We offer an approach that does just that: help local businesses get more customers and local nonprofit raise more funding. #smallgyfts #doublegooder
I fully expect that the lessons we learn now will make us stronger and better capable to handle future pandemics and massive economic shifts.
Eric this is a well-written article that has reminded me to be more conscious about where I shop. It is so important to support our local businesses and keep revenue in our own communities. Small businesses survival depends on it! Thank you
Daphne Merritt
#MyMoneyStaysLocal
This is well written and to the point. We need to search out local businesses first!
I’ve owned a small salon for over thirty years I’m already past the point of closing but I can’t find it in my heart to say goodbye to my multiple of generations of different families and can’t stand the thought of laying my employees off. I wish there was more help out there for us still trying to have the American dream. Any advice would help me I’m not ready to giveup
I think brick and mortar business are suffering more or at a disadvantage because of monthly expenses for the upkeep than a virtual operated business or businesses that are digital or can operate online. It's really sad, there's nothing like walking into a shop and real person to person interaction, but we are living in the digital and AI age now which unfortunately is affecting many businesses or causing the shutdowns and folks losing their jobs.
Yes indeed and make sure once we shift our spending back to locally owned businesses, we play A VERY IMPORTANT ROLE in making sure the businesses have all they need in representation, overall council support and weekly FUN DAY FUN SALES to help keep up an interest! Money may talk, but humanity and belief in a business and their ability to maintain and sustain itself is what will save the day!
I choose to shop locally to support my small businesses who are neighbors in Vermont. As a small business consultant, I understand how the Mom & Pops businesses keep it real everyday. I choose not to use mail order if I can find in my local small business stores. I am buying "Made in the USA", Made in Vermont, made by Americans over imports. We need to support our country and we will all do better for it!