After living in New York City for the past ten years, I have witnessed the closing of several local businesses I loved going. Just this past summer about eight local businesses closed in one block by Christopher street between Hudson and Bleecker Streets.
According to SBJSA:
“Every month, 1000–1200 New York City small businesses are forced to close their doors.”
Many factors may cause this, but the main reason is gentrification. As Ruth Glass first used the term to describe middle-class people displacing lower-class residents in urban neighborhoods, based on what happened in a neighborhood, in London:
“One by one, many of the working class quarters have been invaded by the middle class — upper and lower … Once this process of ‘gentrification’ starts in a district it goes on rapidly until all or most of the working class occupiers are displaced and the whole social character of the district is changed.”
Along with residents, local businesses are also forced to leave because their landlords triple the price of rent. And they are replaced by chain stores and new local stores that can afford this rent. And for those new local businesses that decided to take this high rent, surviving high costs can be challenging.
I talked with about seven local business owners to understand their experiences having a business in NYC.
Here are their main challenges:
- They have very slim profit margins due to high rent and taxes.
- Lack of long-term security due to short leases.
- City paperwork and regulations are a burden.
- Lack of local community engagement.
When I asked them what makes them successful, they answered:
- Have experience working in the industry before opening their business.
- Have business skills, good accounting, and bookkeeper.
- Do collaborations with other businesses.
- Add to the local community.
- Have a social media presence and brand awareness.
After learning that lack of local community engagement is a challenge for some and that when for others adding to the community is vital for their business to succeed, I decided I want to focus my idea/solution in this topic.
So I asked myself, how might we incentivize New Yorkers to shop and eat more locally?
I plan to start interviewing locals next. I had some casual conversations with friends and made some desk research and here are some reasons people wouldn’t shop or eat at local small businesses:
- Lack of quality or consistency.
- They are looking for a specific item that only a chain store has it.
- People don’t have a connection to the local places.
- Online shopping offers better deals and is convenient.
- Shops and restaurants become obsolete over time. New residents don’t relate to the old businesses.
Existing Resources for small businesses:
Here are some local resources and policies that are helping small businesses:
The Small Business Jobs Survival Act (SBJSA) is a bill that has been introduced in the NYC City Council that would give commercial tenants three specific rights:
- A minimum 10-year lease with the right to renewal, so they can better plan for the future of their business.
- Equal negotiation terms when it comes time to renew their lease with recourse to binding arbitration by a 3rd party if fair terms cannot be found.
- Restrictions to prevent landlords from passing their property taxes on to small business owners.
NYC Love Your Local was created by the NYC Department of Small Business Services (SBS) to help local businesses continue providing the jobs, goods, and services that make our neighborhoods vibrant. In their website, business owners can apply for services and residents can nominate the businesses they love for services. They offer expert advice and grants.
The NYC Department of Small Business Services (SBS) helps unlock economic potential and create economic security for all New Yorkers by connecting New Yorkers to good jobs, creating stronger businesses, and building thriving neighborhoods across the five boroughs.
They offer resources and services to local small businesses:
- Advice to start a new business
- Educational resources
- Help with licenses and permits
- Free legal advice
- Save money through government incentives
- Build and train your team
- Sell to government and corporations
- Prepare for emergencies