Two years ago we purchased a pair of well made bicycles for our children, choosing to give our business to a local bike shop. Previously, we had made the mistake of buying bikes from a big box retailer, but the quality of these earlier purchases proved to be abysmal.
Shopping locally also helped a trusted and respected business or so we thought. This past December we came across a write up in our weekly town paper revealing that the owner had closed his shop, citing competition from online stores as well as tightening credit as being reasons why he had to close down.
Local Merchants Shut Down
Several weeks ago I paid a visit to our local indoor mall, a shopping destination that opened twenty years ago. Over time, the mall has gone through several updates and has seen anchor stores change name or be replaced. Out of the 144 stores and kiosks in this mall, 12 were recently vacant the most the mall has seen at any one time in its history.
This past Saturday, The Wall Street Journal has a write up about small businesses in America which revealed something that I had long suspected: while online competition can make it tough going for some businesses, a lack of credit is hurting many others.
Banks Get The Bucks, Small Businesses Get Nothing
Big banks including Bank of America, Wells Fargo, J.P. Morgan Chase and Wachovia have been seeing tens of billions of dollars of bail out money flowing in as have AIG, General Motors and Chrysler. With the financial institutions, those monies were supposed to flow out to their customers in the form of loans, but the opposite has happened: credit lines have been cut or canceled.
Small businesses rely on credit lines in order to purchase inventory. When the inventory is stocked on store shelves, then it can be sold to customers. These customers provide the profit and taxes (state, local) needed to keep the business afloat and the owner takes a portion of sales income to repay their debt.
As Congress and the Obama administration hammer agreeements to prop up big businesses, small business operators across the country are suffering. About 70% of the jobs created in America are by small business owners, those companies with 500 or fewer employees. But, a survey of your local shopping district will see that while some stores are open for business, they may have already laid off one or two employees in a bid to stay afloat.
Unemployment’s Effects Are Far Reaching
One or two employees lost may not seem like a major impact, but when tens of thousands of businesses do the same, the consequences are far-reaching to the community: unemployment increases, payroll taxes decrease and sales taxes — which funds a significant chunk of community operations is no longer there.
So the next time you visit your neighborhood merchant, why not ask him or her how they are doing? Chances are you’ll gain an appreciation for their struggles perhaps to the point in encouraging you to press your elected officials to step up to the plate.
Adv. — Are you looking for shopping ideas? If so, please visit the nbuy.com center for useful tips. In addition, why not visit saylowerbills.com to figure out ways you can manage all of your important bills.
Amazon Affiliate Disclosure: SayEducate.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com. The commission earnings are used to defray our cost of operation.
View our FTC Disclosure for other affiliate information.
Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".
Why Your Local Business Closed Shop
Two years ago we purchased a pair of well made bicycles for our children, choosing to give our business to a local bike shop. Previously, we had made the mistake of buying bikes from a big box retailer, but the quality of these earlier purchases proved to be abysmal.
Local Merchants Shut Down
Several weeks ago I paid a visit to our local indoor mall, a shopping destination that opened twenty years ago. Over time, the mall has gone through several updates and has seen anchor stores change name or be replaced. Out of the 144 stores and kiosks in this mall, 12 were recently vacant the most the mall has seen at any one time in its history.
This past Saturday, The Wall Street Journal has a write up about small businesses in America which revealed something that I had long suspected: while online competition can make it tough going for some businesses, a lack of credit is hurting many others.
Banks Get The Bucks, Small Businesses Get Nothing
Big banks including Bank of America, Wells Fargo, J.P. Morgan Chase and Wachovia have been seeing tens of billions of dollars of bail out money flowing in as have AIG, General Motors and Chrysler. With the financial institutions, those monies were supposed to flow out to their customers in the form of loans, but the opposite has happened: credit lines have been cut or canceled.
Small businesses rely on credit lines in order to purchase inventory. When the inventory is stocked on store shelves, then it can be sold to customers. These customers provide the profit and taxes (state, local) needed to keep the business afloat and the owner takes a portion of sales income to repay their debt.
As Congress and the Obama administration hammer agreeements to prop up big businesses, small business operators across the country are suffering. About 70% of the jobs created in America are by small business owners, those companies with 500 or fewer employees. But, a survey of your local shopping district will see that while some stores are open for business, they may have already laid off one or two employees in a bid to stay afloat.
Unemployment’s Effects Are Far Reaching
One or two employees lost may not seem like a major impact, but when tens of thousands of businesses do the same, the consequences are far-reaching to the community: unemployment increases, payroll taxes decrease and sales taxes — which funds a significant chunk of community operations is no longer there.
So the next time you visit your neighborhood merchant, why not ask him or her how they are doing? Chances are you’ll gain an appreciation for their struggles perhaps to the point in encouraging you to press your elected officials to step up to the plate.
Adv. — Are you looking for shopping ideas? If so, please visit the nbuy.com center for useful tips. In addition, why not visit saylowerbills.com to figure out ways you can manage all of your important bills.
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Amazon Affiliate Disclosure: SayEducate.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com. The commission earnings are used to defray our cost of operation.
View our FTC Disclosure for other affiliate information.