And in February 2015, Family Pride Finer Foods, a small grocery store that had been in business for 12 years in Chicago's southwest side, closed its doors, with the owner noting, "It's just the competition – competition with Jewel [a large grocery chain]. I have five Jewels within a two-mile radius."

However, more and more, the competition facing small businesses isn't coming just from large private chain competitors. It's coming from various agencies and levels of government.

When the owner Vigiano's II, a Marion, Illinois, gym and fitness center that had been in business for 20 years, closed his doors in January 2015, it was because of competition. A new $16 million complex, called the Hub Recreation Center, while not yet open, actually began enrolling members in mid-2014. After that, renewals and new memberships at Vigiano's began to plummet, finally forcing the owner to close his doors.

While the owner was not averse to competition that was on a level playing field, what concerned him most was that the Hub is a government-funded endeavor, paid for in part with a $2.5 million Illinois state grant, and the rest funded through city bonds, which are funded by a local motel tax. A note on the gym's shuttered door read, "The closure is due to a changing business climate and increased competition. The newest competition is a government-funded project ultimately supported by tax dollars."

Even the larger chains are feeling the pressure of government-financed competition. A spokesperson for Gold's Gym in Marion reported that walk-in traffic in his gym dropped off by 60 percent in late 2014, while the Gold's Gym in Carbondale, a town 16 miles away, saw business remain steady.

Similar problems exist in other cities around the country. For example, when West Coast-based Stone Brewery recently opted to open its East Coast brewery in Richmond, Virginia, there was a lot of excitement, but not all of it positive. The Richmond Restaurant Group, for example, expressed its opposition to the decision by the city to give Stone Brewery $8 million to open a restaurant/bistro alongside its brewery. "We feel like they should do it on the same merits that everybody else in the city has had to work so hard to get," said Michelle Williams, a member of the Richmond Restaurant Group, in an interview in the local newspaper, The Virginian-Pilot.

"For every restaurant that opens, one probably closes," added Michael Byrne, another restaurant owner. "Stone will be competing with us head-on, on a site that is going to get the kind of money that you don't see in a small business loan. They're building a serious restaurant."

Asked by the Wall Street Journal to comment on the Richmond project, Roger Noll, an economics professor emeritus at Stanford University, noted that development efforts are "not a big component of government spending, but it's definitely growing. The new wrinkle is to have a subsidy be an investment of some sort. Why should a small local business be discriminated against, relative to a larger newcomer?"

In sum, while small business owners have always had to worry about competition, they now have to worry about competition coming from a new source – their local and state governments, entities that they support with their own tax dollars (property taxes, sales taxes, etc.). As such, one could say that small business owners are now actually required to provide financing for their soon-to-be competitors.