Annual Independent Business Survey Reveals a Need for Change

With an election year on the horizon, many state and federal policies are poised to come under a microscope. As they do, small business owners across the country will be watching with concerns and ideas of their own. The results of the 2019 Independent Business Survey, released Tuesday by the Institute for Local Self-Reliance (ILSR), show that small businesses need policies that level the playing field between independents and their amorphous competitors.

Because of their independent nature, small businesses can successfully adapt to changes in the market or culture. They adapt quickly and bounce back easily, making them resilient through fluctuations in the economic and political climate. In fact, this resiliency is part of what makes small businesses so valuable to their communities. When economic conditions threaten the stock market, the housing market and other vital systems, independent businesses can keep their local economies diverse and nimble.

Still, these businesses face noteworthy challenges to starting and growing their operations. As the Independent Business Survey shows, small businesses struggle to compete with aggressive retailers like Amazon, comply with government regulations and find affordable commercial space. Data from the study reveal the pervasiveness of these issues:

• 75 percent of independent businesses consider competition from Amazon to be a top challenge to their business.
• 60 percent of independent businesses worry that health insurance benefits are too costly.
• Approximately one-third of independent businesses agree that mergers among suppliers and/or competitors in their industry are creating unfair playing field.
• 46 percent of independent businesses that lease space report that commercial rents in their locales are rising faster than sales.

These challenges ultimately affect all American consumers, causing a loss of market diversity and threatening the economy’s resilience. Fortunately, independent businesses know how to adapt – and they know what will help them adapt. Key policy changes can go a long way to leveling the uneven playing field:

• A staggering 91 percent of independent businesses support legislation to cap state and local tax breaks for big businesses. These economic incentives promise big investments to local economies but rarely follow through on employment and productivity goals.
• More than half – 53 percent – of independent retailers consider credit card swipe fees to be a top policy concern for their business. Concentration in the credit card processing field, which is dominated by Visa and Mastercard, has created a stifling, rather than competitive, environment for independent businesses.
• Some 70 percent of independent businesses want to see federal and state regulators investigate Amazon for violations of antitrust policies. According to one survey respondent in Colorado, “Breaking up the Amazon monopoly is probably the number one achievement that the federal government could undertake to make the independent business economic climate fair.”

This year’s results build on previous findings published by ILSR. In previous Independent Business Surveys, ILSR has found that independent businesses continue to grow, despite competition from online retailers and unfriendly policies. However, continued consolidation in the market poses a growing threat – and this year’s results give advocates, leaders and policymakers the guidance they need to level the playing field.

After reading the full study, support ILSR’s work and help strengthen independent businesses by donating online.