Killing Small Business

“It is absolutely killing the small business industry, the bars and restaurants in Michigan. I get phone calls on a daily basis from places that are close to shutting down.” –Scott Ellis, Michigan Licensed Beverage Association, on Michigan’s smoking ban

There are several common-sense reasons why this isn’t surprising.

Every business owner we’ve spoken to that allowed smoking before the ban has lost some portion of smoking customers. In many cases, they’ve also lost a large amount of the nonsmoking customers smokers brought with them. And while some smoking customers may still dine out, go bowling, play pool, etc., they now do so less frequently due to the ban, overall.

One of the central ideas behind the ban was that it would act as a deterrent so that customers would quit smoking. The social awkwardness of not being allowed to smoke while dining out (part of what ban advocates call “de-normalization”) would pressure smokers into quitting. But this only worked halfway; Michigan’s smoking rate remained unchanged, and now many smokers have ditched bars and restaurants. They prefer to entertain at home or at alternative locations where they still feel welcome.

This makes sense. As business owners are aware, when something patrons enjoy is removed–no matter how trivial–it affects the bottom line.

Some smokes do still dine out, of course. We’ve heard many complaints about the ban from business owners who say their customers are outside smoking instead of inside smoking and spending money. Smoking customers and their friends also tend to leave earlier than they would if there were no ban. These numbers add up.

Surprisingly, bans tend to hurt businesses which didn’t allow smoking to begin with. No-smoking bars and restaurants were unique pre-ban, but have since lost that novelty. In Minnesota, for example, Starbucks voluntarily went smoke-free before their state’s ban. This allowed them to build a niche market because they were one of the few coffee shops which had done so. This was taken away after the ban was enacted, and at least 26 Starbucks closed shortly thereafter.

If a business like Starbucks can be so devastated, it’s not hard to imagine the kind of havoc a statewide ban can have on small mom-and-pop bars and restaurants.