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As 42% of Consumers Plan to Participate in Small Business Saturday, Here’s Where Very Small Businesses Dominate

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The holidays are rapidly approaching, and for many business owners, that means an influx of holiday shoppers. But while bigger businesses may dominate the competition for Black Friday shoppers, small business owners have their own special day: Small Business Saturday, which falls on Nov. 26 in 2022.

We’ll go over how consumers plan to celebrate Small Business Saturday, according to new LendingTree survey data. In addition to highlighting the demographics most likely to participate (and shell out the most money), we’ll discuss where businesses with fewer than five employees are most — and least — dominant, based on an average of three metrics.

Key findings

  • 42% of Americans plan to participate this year in Small Business Saturday, spending an average of $271. In our Small Business Saturday survey last year, 49% of consumers said they’d participate, equating to a 14% year-over-year drop.
  • Six-figure earners are the most likely to participate in Small Business Saturday — and the most likely to spend. 53% of consumers who make $100,000 or more expect to participate this year, spending an average of $401.
  • Small Business Saturday emphasizes small businesses — more than half of which have fewer than five employees. 55.0% of all businesses across the U.S. have fewer than five employees.
  • Very small businesses are most dominant in Utah, based on a LendingTree analysis of three metrics (see the methodology for details). 59.5% of businesses in the state employ less than five people — sixth-highest in the U.S. Critically, that figure is up 2.2% from 2016, the largest five-year increase across the country. Behind Utah, very small businesses dominate the most in Florida and Georgia.
  • The state with the least dominance among very small businesses is North Dakota. 52.3% of businesses in the state employ less than five people, a figure that’s dropped in the past year and past five years. Just ahead of North Dakota are Michigan and Kentucky.

42% plan to participate in Small Business Saturday

This year, 42% of Americans plan to participate in Small Business Saturday. That’s a 14% drop from last year, when 49% of consumers said they’d participate.

LendingTree chief credit analyst Matt Schulz says that consumers’ budgets may be tighter because inflation is at a 40-year high — and many may stick to more affordable Black Friday deals.

“People just don’t have the financial wiggle room that they’ve had in the past couple of years, so many are being far more selective with their spending,” Schulz says. “While in previous years, they might’ve been willing to get a little spendy to support their favorite local business, they may be a little reluctant to do that now.”

Consumers who plan to participate this year say they’ll spend an average of $271. That’s less than the average of $305 that consumers planned to spend last year, but some demographics plan to spend much more (more on that below).

Six-figure earners most likely to participate

There is some good news for small businesses: There may not be as many consumers to reel in this year, but they may hook some big fish. That’s because 53% of six-figure earners plan to participate in Small Business Saturday, making them the most likely demographic to do so.

Six-figure earners would generally be least likely to feel the impact of inflation on their budgets, and they’re also the most likely group to spend. Six-figure earners say they plan to shell out an average of $401 — beyond the amount any other demographic plans to spend, and the only income group above the $300 threshold.

Comparatively, just 32% of those making less than $35,000 plan to participate, though they’re not the smallest spenders by income. Instead, consumers making between $35,000 and $49,999 who plan to participate in Small Business Saturday are the least likely to shell out for the day, spending an average of $189.

By generation, millennials (ages 26 to 41) are the most likely to participate, and they’re also the most likely to spend. To break it down:

  • 50% of millennials plan to participate, spending an average of $371
  • 43% of Gen Xers (ages 42 to 56) plan to participate, spending an average of $222
  • 40% of Gen Zers (ages 18 to 24) plan to participate, spending an average of $213
  • 29% of baby boomers (ages 57 to 76) plan to participate, spending an average of $150

Additionally, parents with children younger than 18 (50%) are more likely to participate than those with no kids (38%) and those with only adult children (35%).

More than half of all businesses have fewer than 5 employees

Of course, Small Business Saturday celebrates small businesses — which make up nearly all (99.9%) of the firms in the U.S. Drilling deeper, 55.0% of all businesses across the U.S. have fewer than five employees. That figure has remained relatively stable over the past five years, as 54.4% of all businesses in the U.S. had less than five employees in 2016.

According to Schulz, those figures mean it’s crucial for consumers to show support this Small Business Saturday — and that’s particularly true in this economic climate.

“Small businesses tend to run really lean with tiny profit margins,” he says. “That makes inflation a really big deal because it whittles away at those small profits, leaving companies no choice but to raise their prices and potentially make sacrifices such as reducing staff.”

He notes, in addition, that many businesses may expect Small Business Saturday to bring in extra traffic and extra revenue, which may factor into budgeting and profit projection. If that extra revenue doesn’t materialize on that day, it can make things more challenging for these businesses for the rest of the year.

Where very small businesses are most (and least) prominent

Very small businesses are most dominant in Utah. There, 59.5% of businesses employ less than five people — sixth-highest in the U.S. That figure is up 2.2% from 2016, the largest five-year increase across the country.

This comes amid strong state government support of small businesses, particularly during the COVID-19 pandemic. Beyond the federal government-backed Paycheck Protection Program (PPP) loans, Utah offered low-interest small business loans through the Small Business Administration. For businesses with 50 or fewer employees impacted by COVID-19, Utah offered 0% interest loans for up to 60 months through its Small Business Bridge Loan Program.

States where very small businesses are most prominent

RankStatePercentage of businesses with fewer than 5 employees1-year change5-year change
1Utah59.5%1.3%2.2%
2Florida63.0%0.8%1.2%
3Georgia56.5%0.9%1.4%

Source: LendingTree analysis of U.S. Census Bureau 2020 County Business Patterns survey data. LendingTree researchers created a score using each state’s average rank across these three metrics.

Behind Utah, very small businesses dominate the next most in Florida: 63.0% of businesses have fewer than five employees (up 1.2% from 2016), the highest percentage across the U.S. Following that, 56.5% of businesses in Georgia have fewer than five employees — up 1.4% from 2016. That increase is the third-biggest jump across the U.S.

Both states supported small businesses during the pandemic. For businesses with two to 100 employees, Florida implemented the Small Business Emergency Bridge Loan Program, providing loans of up to $50,000 with one-year terms to small businesses in need. Meanwhile, Georgia provided small business aid, resources and information through the University of Georgia’s Small Business Development Center, which deployed a “Response and Recover” network throughout the university’s 18 state offices.

On the other end of the list, very small businesses are the least prominent in North Dakota. Overall, 52.3% of businesses in the state employ less than five people. That’s not even bottom 10 in the U.S., but it’s a year-over-year drop of 0.1% in the past year — tied for third-worst.

States where very small businesses are least prominent

RankStatePercentage of businesses with fewer than 5 employees1-year change5-year change
1North Dakota52.3%-0.1%-0.1%
2Michigan51.3%0.1%-0.2%
3Kentucky49.6%0.4%-0.8%

Source: LendingTree analysis of U.S. Census Bureau 2020 County Business Patterns survey data. LendingTree researchers created a score using each state’s average rank across these three metrics.

Michigan is second-worst on this list. Of the businesses in the state, 51.3% employ fewer than five people. While small businesses have grown by 0.1% in the state in the past year, that figure is down by 0.2% from 2016 — bottom 10 across the U.S. Following that, 49.6% of Kentucky businesses are very small. In the past year, very small businesses in the state have grown by 0.4%, but that’s down 0.8% from 2016 — the second-worst behind Missouri.

Full rankings

States where small businesses are most prominent

RankStatePercentage of businesses with fewer than 5 employees1-year change5-year change
1Utah59.5%1.3%2.2%
2Florida63.0%0.8%1.2%
3Georgia56.5%0.9%1.4%
4Wyoming60.6%0.5%2.0%
5California57.4%0.7%1.3%
6Arizona55.2%1.0%1.4%
7Delaware56.4%1.5%0.9%
8Montana61.1%0.5%1.3%
9Texas52.7%0.8%1.4%
10Nevada54.2%1.1%0.6%
11Illinois56.8%0.4%1.0%
12Arkansas52.6%0.7%1.3%
13Colorado59.8%0.4%0.7%
14Idaho58.2%0.3%0.9%
15North Carolina53.5%0.5%0.8%
16Hawaii52.5%0.5%0.9%
17South Carolina52.6%0.5%0.9%
18Mississippi50.6%0.6%0.7%
19Iowa53.5%0.2%1.1%
20Louisiana50.5%0.5%1.0%
21Virginia53.0%0.5%0.5%
22Alaska57.3%0.0%0.5%
23Washington56.0%0.2%0.3%
24New York60.2%0.0%0.2%
25Alabama49.6%0.6%0.3%
26Maryland53.2%0.3%0.3%
27South Dakota55.6%-0.2%0.6%
28Ohio48.1%0.5%0.4%
29Nebraska54.7%-0.1%0.4%
30Oregon54.4%0.2%0.0%
31Wisconsin50.1%0.5%0.2%
32Tennessee48.0%0.5%0.3%
33Maine57.3%0.0%0.0%
34New Jersey56.3%0.1%-0.3%
35Indiana49.5%0.4%0.4%
36Kansas52.7%0.2%0.2%
37Oklahoma53.9%0.1%0.2%
38Massachusetts53.1%0.1%0.2%
39Vermont56.5%0.1%-0.5%
40Minnesota53.7%0.1%-0.1%
41West Virginia48.2%0.3%0.4%
42District of Columbia49.8%0.1%0.6%
43New Hampshire51.7%0.5%-0.3%
44New Mexico51.5%0.3%-0.1%
45Missouri54.1%0.1%-2.4%
46Pennsylvania50.9%0.2%0.0%
47Connecticut51.8%0.1%0.2%
48Rhode Island54.5%-0.3%-0.5%
49Kentucky49.6%0.4%-0.8%
50Michigan51.3%0.1%-0.2%
51North Dakota52.3%-0.1%-0.1%

Source: LendingTree analysis of U.S. Census Bureau 2020 County Business Patterns survey data. LendingTree researchers created a score using each state’s average rank across these three metrics.

Expert tips to attract consumers this Small Business Saturday

If you’re a small business owner, you’re likely looking to attract consumers as the holiday season begins — and Small Business Saturday can be a great opportunity, according to Schulz.

“Small Business Saturday can be a big deal for businesses that lean into it,” he says. “There are so many opportunities. Reaching out to your local Chamber of Commerce or small business alliance to see what they’ve got cooking can be a good place to start.”

He also recommends:

  • Registering for the American Express Shop Small map. This map, designed to support small businesses, allows American Express card users to get rewards — like cash back bonuses or points — for shopping at participating businesses. For added exposure, registered businesses may be included in local recommendations for card members. To be added to the map, log in or register for a merchant profile on the American Express website.
  • Teaming with other small businesses. Schulz says that teaming up can help raise your profile and introduce yourself to new customers. “It could be coming together to form an event with live music and refreshments, or it could be as simple as partnering up through social media,” he says. “Whatever you pursue, it’s a good opportunity to get creative and forge some relationships that might help you in the future.”
  • Considering reaching out to local media outlets. Schulz says there’s a good chance they’ll have someone covering Small Business Saturday and may want to speak with a local entrepreneur. It’s a great way to get some free publicity.

Methodology

LendingTree researchers analyzed data from the U.S. Census Bureau 2020 County Business Patterns survey to find the states where small businesses dominate.

Specifically, researchers found the number of businesses in each state that employed less than five workers in 2020, 2019 and 2016. We ranked the states by:

  • The percentage of businesses that employed fewer than five people in 2020
  • The percentage change from 2019 to 2020 (one-year)
  • The percentage change from 2016 to 2020 (five-year)

We then created a score using each state’s average rank across these three metrics.

Separately, LendingTree commissioned Qualtrics to conduct an online survey of 1,548 U.S. consumers ages 18 to 76 from Oct. 5-6, 2022. The survey was administered using a nonprobability-based sample, and quotas were used to ensure the sample base represented the overall population. All responses were reviewed by researchers for quality control.

We defined generations as the following ages in 2022:

  • Generation Z: 18 to 25
  • Millennial: 26 to 41
  • Generation X: 42 to 56
  • Baby boomer: 57 to 76
 

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