New Amex report highlights the ‘boomerang’ dollar’.
How important is small business to the local community? According to a new American Express report one quarter of every dollar spent in Australia goes to a small business, with, on average, 42 cents in every dollar spent, reinvested back into the local community. This trend, coined by Amex as the ‘Boomerang Dollar,’ clearly demonstrates the important role local business can have on the community.
Yet, according to Amex, Australians are still choosing larger companies over smaller independent businesses. However, 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. And, Australia’s small businesses are banding together to keep local customers coming through their doors.
The report found that two-thirds of consumers would choose a small business or recommend it to others if it supported other local businesses, and 59% of firms with strong neighbourhood networks reported increased sales through referrals, while 45% has an increased customer reach.
American Express released The Economy of Shopping Small: Keeping it in the Community report to mark the start of Shop Small 2017. Now in its fifth year, the national event that runs during November was founded by American Express to encourage support of small business. Amex card members who spend $20 or more in one transaction, in-store at a participating Shop Small merchant, will get $10 back. Members can redeem the offer once per participating merchant, up to five times.
Speaking at a media event in Sydney to launch the new report, Amex vice president for small merchants, Katrina Konstas said the ‘Boomerang Dollar’ effect showed that almost $38 billion is reinvested into communities every year through local spending. “Shopping small can have an enormous effect,” she said. “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 in small businesses is less well known.”
Celebrity chef, Luke Mangan (pictured above) said any business, whether it is small or large, needed to have a point of difference “the business has to offer something different and special,” he said. While acknowledging that the risk of failure in small business is high, he said it was important to “learn to adapt, see what is out there and understand the business side of the business.”
Council of Small Business of Australia, CEO Peter Strong said one of the advantages of running a small business is if something goes wrong there is time to change. “You have the ability to see when it is happening and fix it quickly,” he said. “Loyalty might be an old-fashioned concept, but when you consider the majority of Australians have lived in their local area for three years or more, the longevity of local businesses important.”