In a time when countless retail giants are cutting costs, laying off and closing their doors, many small business owners are left wondering whether they’ll be next. It’s easy to see that the economic down turn has forced consumers to rethink their spending habits. Though the media tends to focus more on large corporations, small businesses across the country are getting hit just as hard.
In Austin, Texas people are saving money by waiting longer to get their hair cut. The Austin American-Statesman staff interviewed hairstylist Deborah Schrimpsher, who said that her customers now average only one haircut every two months, instead of one every five weeks, and that many people are choosing to color their hair at home.
In San Francisco, Wendy’s Cheesecake Bakery has suffered a dramatic decrease in customers over the past few months. SFGate also reported that the bakery’s owner Willie Howard said his business has had to cut prices in order to attract customers. Though the bakery may be cutting their prices, wholesale food retailers are not. Business owners like Howard are paying more for their supplies and selling less. It’s not a good equation.
The examples in San Francisco and Austin are just two of many.
A recent study conducted by the United States Federation of Small Businesses (USFSB) revealed that 95% of small and medium-sized business owners feel their businesses have been challenged. More than 55% of those surveyed reported their own personal business is “down.”
The study further reported that major obstacles for small business owners included decreased sales, less access to credit, health care costs, and rising gas prices.
Could all this bad news be good news for online businesses?
According to a study conducted by Harris Interactive in September the majority of American consumers plan to spend less on gifts during the holiday season. In order to save money, 37% of the respondents said they planned to shop online to save gas and find better deals. Eighty-three percent of online adults said they were willing to do their gift shopping on the Internet, and that they would most likely purchase books, music and electronics.
This means that online businesses still have hope for a successful holiday season, at least as long as they continue marketing their products. All too often media predictions about the economy negatively influence business owners, and advertising is one the first expenses they cut.
When retail stores are failing online businesses should be the first to increase their advertising in order to grab the buyers who aren’t wasting their time or money on gas to get to stores.