Sluggish Economy Pits Large Retailers against Business Owners
Submitted by: Pearlman Equity Growth
2013-09-13 00:01:34
Small businesses struggle as customers turn to Internet, discount stores
Chicago, IL (OPENPRESS) Small business owners are facing big problems. Low consumer spending and anemic economic growth is taking a huge bite out of their revenue streams. As consumers look to stretch their dollar further, more and more are turning to large online retailers like Amazon or big-box discount stores like Wal-Mart. Worse yet, many small businesses find themselves frequented by potential customers who are merely "show rooming", a practice where they shop for products in a physical store only to buy them online from a separate retailer later.
"Show rooming is a serious problem," says Stuart Pearlman, a consultant for PEG, a small business consulting firm based in Algonquin. "Consumers get the product they want and Amazon gets the business while small business owners are left with huge overhead costs and no additional revenue from the sale."
Even restaurants are feeling the crunch as global franchises including McDonald's and Wendy's revamp their dollar menus to entice consumers. Alan White, a hot dog vendor from Crystal Lake, says that his business has faltered against the razor-thin margins McDonald's can produce. "I see people go in there and split a meal for five dollars. The cheapest combo on my menu is $3.50, and I don't even make any money off of it."
Despite the bleak conditions facing small business owners, their contribution to the U.S. economy remains substantial. Bloomberg Businessweek reports that small businesses account for 80% of new hires since the global economic downturn in 2008. "Small business owners have to make themselves invaluable to their customers and distinguish themselves from the competition," Pearlman offers. "They're already the backbone of the economy, now they need to become the backbone of their community."
Pearlman Equity Growth provides comprehensive, onsite consultations to small businesses in the northwest suburbs of Chicago. It also hosts free seminars for small business owners and launched a local referral network to help strengthen relationships between non-competing small businesses.
