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Look who’s championing small business!

November 8, 2017 Headline News No Comments Email Email

Australians are choosing larger companies over smaller independent businesses, which should concern smaller travel agents. A counter-movement to support small, local enterprises has begun and ironically, one of the world’s biggest and best-known companies is behind it.

American Express is no small business – the brand is estimated to be worth USD 18.36 billion – but the New York-based multinational financial services corporation supports a lot of small merchants and has been involved in travel for many decades.

Amex is currently throwing its weight behind efforts by Australia’s small businesses to band together to keep local customers coming through their doors. Throughout this month, thousands of smaller travel businesses participating in Shop Small should see a boost in the number of consumers arriving – with American Express giving card members AUD 10 back on every AUD 20 they spend at those participating businesses.

A quarter of every dollar spent in Australia goes to a small business, Amex points out.

More importantly, on average, 42 cents of each dollar spent at a small business is reinvested back into that local community. This trend, which American Express calls the “boomerang dollar”, clearly demonstrates the important role local businesses play in our daily lives.

To mark the start of Shop Small this November, American Express has released The Economy of Shopping Small: Keeping it in the Community Report highlighting the importance of the boomerang dollar. To see the report and download it:

Money spent with small businesses finds its way back to communities through salaries to residents (27 cents) and payments to local suppliers (12 cents). The remaining 3 cents is used to support local charities, schools and sponsorships.

Yet Australians are still choosing larger companies over smaller independent businesses. Just 29% of consumers claim to have increased their shopping frequency with small businesses in the past year, compared to 37% in 2016.

Despite this, the outlook for small business is positive, with 43% of small businesses reporting increased turnover in the past year, and 41% holding steady. This is good news for more than just the small business sector as almost half of what we spend in small businesses is invested back into local economies.

Katrina Konstas, American Express’ vice president for small merchants says that what goes around comes around.

“Independent businesses have long been recognised as a source of employment and neighbourhood character, but the multiplier effect of choosing to spend money at small businesses is less well known.

“The ‘Boomerang Dollar’ effect shows that almost AUD 38 billion is reinvested into our communities every year through local spending – that’s a huge amount that’s going back into business’ tills, workers’ pockets and towards worthy community causes. Shopping small can have an enormous effect.”

Two thirds of consumers would choose a small business or recommend it to others if it supported other local businesses. Firms with strong neighbourhood networks reported increased sales through referrals (53%), a sense of satisfaction from supporting neighbourhood economies (43%), and increased customer reach (41%); demonstrating that it pays to work with your local peers.

Chief executive of the Council of Small Business of Australia (COSBOA), Peter Strong, observed: “Australia is a nation of neighbourhoods where we put down roots we keep planted for years, so we invest in the places we call home.

“Loyalty may be an old-fashioned concept, but when you consider that the majority of Australians have lived in their local area for three years or more, the longevity of local businesses is important. From years of supporting Shop Small, and the role I play every day at COSBOA, I know the importance of culture and community: which is why I encourage all Australians to join the movement this November.”

Edited by Peter Needham

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