Every year on March 29, we commemorate National Mom and Pop Business Owners Day in the U.S. So, who are today’s ‘mom and pops’—and why are they important?
According to investopedia.com, “‘mom and pop’ is a colloquial term for a small, independent, family-owned business. Unlike franchises and large corporations, which have multiple operations in various locations, mom and pop shops usually have a single location that often occupies a physically small space. The ‘shop’ could be any type of business, such as auto repair garage, bookstore or restaurant.
The site goes on to explain that it’s difficult for mom and pop shops to compete with larger businesses because of the differences in buying power. The good news? Even though this can result in higher prices for the smaller businesses, they frequently have some distinct advantages that enable them to differentiate themselves with unique product offering or outstanding customer service.
But in the wake of the popularity of large chains and big-box stores, many think that the ranks of mom and pop businesses—once present in every city and town in the U.S.—are being decimated. In fact, some business policy makers have been telling us that for years.
But according to researchers at West Virginia University, statistics just don’t bear out this popular belief. Their published findings in Has Wal-Mart Buried Mom and Pop? say that “it can be firmly concluded that Wal-Mart has had no significant impact on the overall size and growth of U.S. small business activity.” The study goes on to say that while Wal-Mart is a factor in the demise of some small businesses, the economy compensates those failures elsewhere due to an economic principle called creative destruction.
That’s a huge relief to businesses and customers across the country who are determined to keep mom and pop businesses alive and thriving. So why is this segment so important?
At least one writer believes that the health of our economy depends on them. Ann Kinkade, the President of Family Enterprise USA, made that case recently in How Mom and Pop Can Save the Economy in Seattle Business Magazine.
Kinkade argues for the reduction of regulatory and tax burdens on family businesses and other kinds of policy reform that would benefit them. After all, she says,
“Family-owned businesses across the country have been stepping up for generations. At 5.5 million strong in the United States, family-owned businesses are generating 57% of U.S. GDP and collectively employing 63% of the workforce. In fact, 75% of all “new jobs are generated by family businesses.”
Take a few minutes to recognize and celebrate mom and pop business owners today. Seek out an independent market or dry cleaner or toy store, and do some shopping. We don’t need to wait until Small Business Saturday to show our support for the businesses (and their fearless owners) that are the backbone of our country.
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