A Silver Lining for Small Businesses During These Troubled Times
Ironically, history suggests that these times may turn out to be an unexpected boom for small businesses.
There are plenty of opinions about what the tariffs will do, from a global recession to a new golden age. Likewise, there is much to be said about how labor will be affected by the new policies toward immigrants. The wars in Ukraine, Gaza, Sudan, and many other places also don’t seem to have an end in sight. Let’s not sugarcoat it. These are worrisome times.
For small businesses, these world events could mean trouble, too. Many small business owners rely on products from abroad, even if only for shipping supplies, and prices for those are going up. It’s happening already, even though most of the tariffs haven’t even gone into effect yet.
This means that small business owners will likely need to raise prices for their products as well. So, even if your small business is isolated from the political changes related to labor, war, and the stock market, you will still feel the effects in some way. I often struggle to make the case to small business owners that politics affect them, but this time, they do.
So, is it all bad news?
Not exactly, and not for those who sell art, crafts, photography, baked goods, and pretty much anything they produce or create themselves. This is ironic because these also tend to be low-margin, highly competitive, and difficult businesses to succeed with. However, history tells us that many of these businesses will do well when the world doesn’t.
Let me explain.
The Historical Connection
There is good reason to believe that customers shop to try and forget about the uncertainty of the world around them. This is especially true for art, comfort products, cosmetics, jewelry, and gourmet food. It may seem counter-intuitive that they would go and shop when times are bad, but that is often what happens.
We have examples from history to draw from. A few hundred years ago, Europeans waged some of the most violent religious wars. You would expect the art of the time to reflect that with great battle scenes and feats of heroism, but it didn’t. Quite the contrary was the case.
The art that was especially popular during those tumultuous times was from the Dutch masters; it was peaceful, contemplative, and bucolic – think farm life, portraits of satisfied folks, and still-life pieces. This is because people wanted to own something peaceful inside their homes when the world outside was so violent.
Ok, but that was hundreds of years ago, one might say. Surely, things are different now. Are they, though? Perhaps the wars are more distant, but recent events have brought the political world to our doorstep, from forced deportations to tariffs. More to the point, many people are very concerned about their well-being, their safety, and their future.
But we don’t need to only look to distant history….
More Recent Examples
After 9/11, the US economy was in freefall. “The Dow Jones Average was down more than 14%, and the S&P 500 Index plunged 11.6%,” according to Investopedia. It was a horrible time, of course, but one of the things people did was to shop for American products. This means that they shopped for products from small local businesses because that was certain to be American. They purchased art, crafts, and clothes from people that they could relate to.
The Bush administration actively promoted this. They wanted people to go about their lives and spend money as a way to help boost the economy. Now whether that was the right message or not has been hotly debated, but the fact is, people did go shopping. As a result, the economy came roaring back, and so did the growth of small businesses, according to the Vox.com article How 9/11 convinced Americans to buy, buy, buy.
A Real-World Example
I have personal experience with this. My father was a photographer just starting out in the late 1990s. He made beautiful and unique photos of flowers and seashells. Yes, I know you’re thinking that was not exactly the kind of art that people would buy - the world is burning, and this guy is selling photos of flowers?
Well, they did. Just like the economy was bouncing back, my father’s business grew by leaps and bounds during the next decade. He was so busy doing art shows all across the states that he hardly had time for a vacation. Business was good.
My father was always eager to learn. He studied the best ways to perfect his art. He talked with other artists, and he was always open to new ideas. Being Dutch, he also knew quite a bit about the Dutch masters, and he took a gamble on this idea that people would be drawn to his peaceful, beautiful, and unique art… and it paid off.
People were devastated by the events of 9/11, and when people were told to go out and shop and enjoy life, they looked for things that would make them forget about all those things. Oftentimes, business success relies on being in the right place at the right time, and my father was there then.
More importantly, he was not the only one. The 2000s saw a surge in the art fair circuit – there were shows throughout the summer months in most major cities in the US. At those shows, there were painters, sculptors, jewelers, and photographers who were all riding that same wave of enthusiasm.
The best part about this is that it served as a tiny renaissance for new artists and craftspeople. It was a new opportunity for art outside of the stuffy old world of exclusive galleries and grand art openings. It was free of the big-name talent agencies, marketing campaigns, and exorbitantly priced art of the past.
More importantly, it served as a symbol of pull-yourself-up-by-the-bootstraps American entrepreneurship. It allowed many artists and craftspeople to earn a comfortable living and start their own small businesses.
OK, but will that happen now?
How this Could Happen Again
It will, if you make it. Back in the early 2000s, no one knew what would happen. Every artist and craftsperson took the same gamble. They trusted in American resilience in the face of horrible tragedy. They trusted in the power of entrepreneurship. They trusted in personal connections between the artist/craftsperson and the customer… and it paid off.
This is why existing small businesses have a huge advantage: they are already there, in the meeting point of that perfect storm. If you already have a small business, the hardest part (starting), is already behind you.
If you are an artist or craftsperson, then this may just be another such renaissance. This isn’t just for arts and crafts, either, but also for vendors of foods, plants, candles, clothes, and just about anything else being sold at local fairs.
Speaking of those, have you noticed how they are also growing in frequency and popularity? I’ve noticed more and more of them in our area, for sure. There isn’t much official data on this industry, but the artworld seems to have noticed. While high-end art sales are noticeably down, smaller artists seem to be doing ok, according to Art-Basel, which tracks these trends:
Art fair sales increased slightly to 31% of total dealer sales in 2024, up 2% from 2023, though still below pre-pandemic levels of 42%. This growth was primarily driven by international fairs (up by 2% to 20%), while local fair sales remained stable. Larger dealers benefited most from this recovery, with those turning over more than $10 million reporting a 4% increase in art fair sales to 34% of their total.
Why This is Bigger than Just Art
Let’s remember that Art-Basel’s figures only track art, not crafts and other goods that small businesses produce. They also only reflect 2024 data, which is before the current economic and political changes that we have seen. The historical trends that matter require political and economic uncertainty, which, while present in 2024, were nothing like they are now.
I believe the main reason customers will come back to small businesses is because people are looking for connections. Products coming from overseas or purchased with a few clicks on Amazon just don’t have the same personal connection. When the political and economic climate tells them that those distant sellers are suspect, they want to have a more comfortable connection to the sellers and their products.
They want to meet the artists, the cooks, and the craft people who make the things that they bring into their homes. They want to have a connection that is more meaningful than an Instagram like or an Amazon rating. Likewise, they want beautiful, peaceful, and healthy things in their homes when everything outside the home is so uncertain.
So, while prices may be going up, demand is also going up. We seem to be in a convergence of factors that favor small businesses, especially small, family-owned businesses and solopreneurships. Higher prices may be the new norm, but so is the personal shopping experience.
What about Online Businesses?
Even if your business is primarily online, you can still ride that wave. You just need to keep in mind what people are really looking for: an authentic connection. Personalize your website and online store, interact with your customers with communications that are not automated, and grow your clients organically.
Forget about wasting hours and your hard-earned dollars on SEOs, social media algorithms, and ChatGPT. Your customers want a real connection with you, so do what you can to build it. Build personal connections rather than technical/electronic ones.
Think of running your online business as much as possible as you would an in-person business. Anything you can do to bridge that economic gap will build trust, which will then generate more organic business for you. In uncertain times, personal connections become much more important than all the noise that people are bombarded with everywhere else.
Conclusion
These are troubled times. I’m not dismissing them. I’m also not saying that we should stick our heads in the sand and just go about our business. There is a time and place for civic engagement and political action, and I am not suggesting that any business owner should set those aside because they run a business.
The fact is, it won’t be possible to ignore the political and economic changes all around us, even for small businesses. This is why I think businesses should seize the moment. There is a very real possibility that these troubled times will be a boon for small businesses. Many of the factors that were there when previous booms followed crises are appearing now, too.
It’s not certain, of course. It’s a gamble. It was a gamble in the early 2000s, too. It likely was a gamble for the Dutch masters, too. Their paintings and sculptures are selling for millions now, so there’s that to consider as well.
Yet, even if you would be happy to just maintain your business and weather these troubled times, then this may just be that opportunity. This doesn’t need to be a terrible time for your small business. Many of the signs suggest it won’t be either.
