New research from American Express in support of Shop Small month suggests that small businesses might be their own best customers, with $204 billion* flowing between businesses every year.
The Economy of Shopping Small: Custom Counts report revealed small Australian businesses sourced goods and services from 4.4 other small suppliers each month, spending an average of $8600 in a typical month or $104,000 annually. A quarter of these businesses (24 per cent) spent more than $10,000 and 10 per cent spent more than $20,000 each month.
The shopkeeper economy is a key driver in contributing to the economic health of small-business communities and has helped increased the number of businesses in local areas. Some 24 per cent said the arrival of new businesses had made it easier to locally source products and services, a third (32 per cent) said it has increased customer footfall and 31 per cent said it had increased profits.
Encouragingly, 26 per cent of small businesses say they would definitely like to collaborate more than they currently do and 58 per cent say they may be open to greater collaboration.
Ms Melanie Cochrane, Senior Vice President, Small Merchant, Global Merchant Services, at American Express said such close collaboration was essential to broader geographic economic health.
“If small businesses can find smart strategies to leverage each other’s products, expertise and customers they’re immediately multiplying what they could achieve alone,” Cochrane said.
“We all benefit if we can produce more precinct powerhouses – small businesses connecting and collaborating across our communities. Small businesses make a very real and important difference to their SME community through their custom and supplier relationships,” she said.
“It’s vital that, while we encourage consumers to shop small, we also encourage and recognise merchants that champion other small businesses both locally and further afield. Behaviour like this is paramount to maintain the colour and diversity of our high streets and preserve our corner stores for generations to come,” she said.
The findings come despite a perceived downturn in support from local consumers. The Economy of Shopping Small: Custom Counts report found more than half of shop owners (53 per cent) said customers are becoming less loyal, while 61 per cent felt customers were becoming less polite too. Three-quarters (72 per cent) of business owners stated they wished locals knew how hard it was to run a small business.
Protecting Australia’s national spirit
To celebrate Australia’s small businesses community and its valuable contribution to the national economy, American Express commissioned cultural archivist and photographer, Mr Eamon Donnelly, to embark on a road trip across the country to capture the faces and stories of some of the great Australian small businesses.
The images will be showcased on various channels throughout November including the American Express Facebook page.
To encourage Card Members to shop in small businesses throughout November, American Express will provide a $10 statement credit to those who have registered their cards in the Shop Small promotion. Card Members will receive the credit each time they spend $20 or more in participating businesses – up to 10 times.
* Australian small businesses spend an average of $8654 each month with other small businesses, making an annual figure of $103,009. This figure has been applied to the total number of small businesses (1.98 million) to deliver a figure of $204 billion.
Inside Small Business