Practical Tips to Support the Local Small Businesses You Love
I went to downtown Toronto recently. I thought it would be busier as the pandemic lockdowns and regulations thankfully, for now, seem to be in the rear view mirror. I was wrong! It was nowhere close to what it was pre-Covid-19. Despite its delicious food and great service, the Japanese restaurant we went to was about 35% full. As we walked in what used to be the thriving entertainment district, we were struck by how many independent stores and restaurants were closed. The impact of the pandemic on small businesses was all too real. Scarier is the knowledge that this is the case in downtowns everywhere.
“Small businesses are the backbone of capitalist economies”, I have often read or heard, but I don’t think I fully understood just how integral small businesses are to our economy. For example, there are about 1.15 million small businesses in Canada and they, rather than large businesses, are the largest job creators in the private sector. Small and medium-sized businesses, with less than 500 employees employ 89.4% of the working Canadian population. Small businesses contributed 40.8% to Canada’s GDP between 2011 and 2015, and medium-sized businesses contributed 12.3%. Together, they have contributed more than large businesses did during the same period (46.9%). (1)
Small businesses have borne the brunt of the Covid-19 pandemic and will continue to suffer even after the pandemic is over. According to a new report from the Canadian Federation of Independent Business (CFIB), small businesses that have taken on COVID-related debt owe an average of nearly $170,000. Among the hardest impacted is the hospitality sector, this figure nearly doubles to $333,174. The CFIB estimates that small businesses in Canada now owe a collective $139 billion due to COVID-19! Repaying this debt will be a daunting challenge and take time as many face a slow pick-up in revenues, staff shortages and uncertainty. (2)
So what can we all do to help our local small businesses?
Shop locally in person and online: Buy from local businesses in person whenever you can. This will not only help their bottom line but provide encouragement – there is nothing like a regular customer. Also buy online from them instead of larger companies as these online sales can help them survive.
Buy gift cards: Even if you do not use them immediately after purchase, this is revenue for small businesses at a challenging time. A gift card also makes a useful gift for someone you do not know what to buy.
Eat out at local restaurants: There is still nothing like going out for a meal. If you feel uncomfortable eating out, you can order takeout. These orders can and will help local restaurants stay afloat. Just remember that if you order via food delivery apps like UberEats, DoorDash, etc., they charge the restaurant a commission of 15-40% of the bill, so it is better to pick up the takeout yourself. Also, share local restaurant delivery menus on your social media pages.
Buy merchandise and promote - Many small businesses now have t-shirts, caps or other branded items for sale online to try to counter the drop in foot traffic. Show your support by buying and wearing their items.
Shop now for later - You can support small businesses by improving their cash flow now. Think about gifts, birthdays, or other purchases that you can buy now and give later.
Do you have website design, marketing or sales skills? - Then offer them to local businesses that don’t have a comprehensive online presence or need help selling and promoting themselves. (3)
Establish a local business network where people can engage with local businesses online. An example of this is GoodLocal, which was started by Obby Khan and Ali Esmail in Winnipeg, Manitoba during the 2020 pandemic.
On top of these ideas, you can also use the power of social media to help small businesses by:
Following your favourite small businesses online
Sharing their posts on your social media – it is good exposure for them.
Writing a review on Google, Yelp or my personal favourite, TripAdvisor. Your review about great customer service or awesome products might make a difference and help them attract new customers.
Telling your family. Use word of mouth to support your favourite small businesses as your family members or friends will likely trust and remember them more because of your recommendation.
Show your support by signing up for the newsletters of your favourite small businesses. This shows them that you are a happy customer and they will be able to notify you of any virtual events or special promotions…that you can then help them promote.
Tag a friend when you see promotions that might interest them. You never know who may be in the shopping mood.
Post a photo on Instagram or a video on TikTok. Give a shout out to small businesses that provide great customer service and products. Share a photo of the small business location or what you bought and tag them.
Lastly, really get to know the people at your local small businesses – relationships matter.
The opinions expressed are those of Wayne Hendry and not necessarily those of Raymond James Investment Counsel which is a subsidiary of Raymond James Ltd. Statistics and factual data and other information presented are from sources believed to be reliable but their accuracy cannot be guaranteed. It is furnished on the basis and understanding that Raymond James is to be under no liability whatsoever in respect thereof. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Raymond James advisors are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters.