Shoppers who walk inside Stitchology next Saturday will find a little more than bolts of fabric, spools of thread and sewing kits.
Every year, Melisa Hart, owner of the North Valley sewing and fabric store, does something special for Small Business Saturday.
This year, she’ll offer hot cider and cookies outside of the shop; inside, customers can learn how to sew her Christmas stocking pattern, or make and take home fabric ornaments.
“I like to try and give them a little bit of incentive to get in or to do something fun and special,” Hart said.
Celebrated the day after Black Friday, Small Business Saturday was founded in 2010 by American Express, and co-sponsored by the U.S. Small Business Association a year later. A survey by American Express estimated that consumers planned to spend $23.3 billion at independent retailers and restaurants on Small Business Saturday in 2021. Over the past 12 years, the company found that consumers reported $163 billion in spending on the day.
Hart said that Small Business Saturday is one of her busiest days throughout the year. Last year, Hart’s sales were 280% higher than an average Saturday.
Participation in the program exploded last year. In November 2020, just 20 businesses made claims with the NM Department of Taxation and Revenue for a total tax relief of approximately $10,000 – half the participation of the inaugural year in 2018, when 40 businesses made claims.
In November 2021, however, 258 businesses around the state filed claims for a total tax savings of about $186,000.
“It really does make a difference to make a concerted effort to get the word out,” said New Mexico Secretary of Taxation and Revenue Stephanie Schardin Clarke.
The Department of Taxation and Revenue, the Economic Development Department and New Mexico MainStreet have been trying to raise awareness and plan events around the tax holiday.
Background
The New Mexico state legislature instituted an annual tax holiday on Small Business Saturday in 2018. Businesses that are based in New Mexico and have under 10 employees can file for exemption from Gross Receipts Tax for the day, and pass along the savings to their customers.
New Mexico Secretary of Taxation and Revenue, Stephanie Schardin Clarke, said that shopping small helps the New Mexico economy.
“It keeps the employment base here,” Schardin Clarke said. “The money that we spend when we shop locally recirculates back into the local economy more than when we shop at big box stores.”
Although several other states have tax holidays throughout the year, New Mexico is the only state with a Small Business Saturday tax holiday, according to the Tax Foundation. In August, New Mexico also offers a back-to-school tax holiday.
Impact felt
Hart recently celebrated the 11-year anniversary of her business at 2502 Rio Grande NW. Although Small Business Saturday was started nationally around the time she opened Stitchology, she said it wasn’t until 2018, when the state introduced the tax holiday, that more customers became aware of the day.
Color Wheel Toys owner Keri Piehl said the holiday also helps customers discover local businesses around Albuquerque.
“It definitely has an initial impact just on the bottom line,” Piehl said. “But then I think it’s also remembering those businesses to patronize throughout the year … so that is helpful in cheering on and promoting the small business community.”
Former teacher Piehl ran Color Wheel Toys as a seasonal pop-up shop for five years before moving into a permanent location in Rio Rancho earlier this year at 6855 4th NW. Small Business Saturday falls smack in the middle of prime toy season, with Christmas just a few weeks later.
She said that she prepares for the day by making sure the shelves are fully stocked.
Small Business Saturday brings an increase in sales, Piehl said. But the majority of her customers, she said, decide to shop not because of the tax holiday, but to support local. Some are even “pleasantly surprised” by the tax break.
Schardin Clarke said this year, the tax holiday can help customers deal with higher prices.
“Especially in a time where families are struggling with inflation, it’s great to have that tax relief available,” Schardin Clarke said. “But beyond that, I think it’s a great way for customers to become familiar with local businesses that they might not have shopped at before.”
Carolyn Richter opened her low-waste refill shop, People & Planet Refill, on Earth Day this year at 3223 Silver SE. Customers can bring in their own containers and fill them with laundry detergent, shampoo, dish soap and more to cut down on their packaging waste.
This will be Richter’s first Small Business Saturday as a business owner. She said before she opened her Nob Hill business, she wasn’t very aware of the tax holiday.
“More people, more customers should know about it,” Richter said. “Because if they can go out and still be giving a business, you know, the full money that they would be getting, but the customer still gets a discount, then everyone wins, right?”
Richter said she’s felt pressure to offer sales on Small Business Saturday, but has decided not to offer discounts.
“Even if I did have a sale … it’s not like I can compete with big box stores anyways. If Target is having a Black Friday sale, then I can’t compete with that,” Richter said. “And so my thought is, if you’re gonna come out on Small Business Saturday, you support businesses because you care about them.”
Richter said that many small business owners have told her that Small Business Saturday is a “make or break” day. With increased holiday spending, small business owners can pad their budgets for slower months in the new year. The increased spending on days like Small Business Saturday can help business owners prepare for slower months.
“What I’m told by a lot of other people … is that they really, really, really hope they have a very good final quarter of the year,” Richter said. “Because they may not have the income they need to cover the regular expenses in the new year.”
The holiday begins at 12:01 a.m. on Saturday, Nov. 26, and ends at midnight that same day.
“If you haven’t found your favorite local business yet, now’s a great time to find your favorite in your community,” Schardin Clarke said.
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