The Support Small Business Farce

You hear it everywhere. You see it on Instagram stickers. People at work talk about it like they are a local superhero. "Support small business." It helps grow the local economy and keeps big evil corp at bay.

I am here to tell you that the notion that people support small business is a complete and utter farce. If anything I learned about microeconomic theory is correct, consumers buy the best good or service at the cheapest or most reasonable price. Customers don't really care where and who it comes from or even how it's made. If they did, Walmart and Amazon would not be the largest retailers. Nike and Adidas would not be the largest apparel companies. It doesn't matter to consumers that companies employ sweatshop laborers for a few nickels a day. Out of sight, out of mind. Again, I don't completely agree with it, at least in theory, but it's how the world operates.

Sure, it's trendy to promote a good-willed marketing ploy like donating a pair of shoes to someone in Africa. But, a lot of these strategies face criticism for their authenticity and it's no secret it's mainly just used as a sales strategy. There are many ways you can try to generate a sale, but appealing to someone's false sense of altruism works particularly well. Adam Smith would back me up on this one... it's not to the baker's benevolence that we owe him our morning chocolate croissant, it's to his self-interest.

As a mentor of mine recently told me, capitalism is survival of the fittest.

While I don't completely agree with this approach, at least in theory, it is the modus operandi here in the United States. On the plus side, it has generated substantial economic wealth and helped lift many people out of poverty. It's also the most realistic way of conducting business without forcing people to behave in ways that are not natural to them.

Again, this is not some Ayn Rand endorsement of capitalism, it's just a matter-of-fact explanation of how I view the situation.

As a small business owner, it's tempting to convince yourself that the community will support you because you are a small business. Truly this is not the case. If anything, consumers use the fact you are small to build leverage against you and capitalize on the situation. It's easier to go after Joe the plumber with no backing other than the wall of his home than it is to make a case against Rooter corp and their high-priced legal team on retainer.

At best, the support small business trope will yield one sale per customer for you, but it is not a long-term winning strategy. Your customers will ultimately turn to the goods and services they need and want for the best price they can find, and that is what will yield a successful business in the long run.

I write this article not to be cynical but to convey a simple truth. Starting and running a business is not easy... and I suggest not making it harder by believing wives' tales about the kind-hearted small business supporter.