A report from the U.S. Small Business Administration (SBA), shows that 99.7% of companies with paid employees are small businesses. To take that further, 65% of net job creation from 2000-2017 was also from small businesses. The importance of small business is crucial in many ways, which is what we are here to talk about today. Small business tips and why small businesses are so important for our country. Let’s dive in!
The Effects Small Businesses Have in Local Economies & Communities
Small businesses have a direct and significant impact on local economies and communities. They are often the backbone of a community, providing jobs and supporting the local economy. Small businesses also play an important role in giving back to the community, through donations of time and money, and by serving as a gathering place for people in the community.
When small businesses flourish, it’s good news for everyone in the community. Local economies benefit from small businesses’ job creation, spending, and innovation. And when small businesses succeed, it strengthens the social fabric of the community. People come together to support their small business neighbors, which builds strong, connected communities.
Let’s take a look in-depth at each way that your local small business is helping to improve your community.
They are Independent & Offer More for Locals
One of the key benefits of small businesses is that they are independent. This means that small businesses are more likely to focus on the specific needs of their local community. They get to know their customers and what they want, rather than offering a one-size-fits-all product or service.
In contrast, large corporations and chain companies often don’t focus on locals and their specific needs. Instead, they try to appeal to as many people as possible, with a standardized product or service. This can be a problem because it can mean that local communities don’t get the attention they need and deserve.
Small businesses ensure that they are catering directly to local needs, cultures, and more. This makes them more connected to and aware of the specific needs and wants of their customers, which helps them to better serve that community.
Create Impactful & Meaningful Jobs
Small businesses are the backbone of the American economy. They provide jobs for millions of people and are responsible for two-thirds of new net jobs as well as 44% of the U.S. economic activity.
Small businesses not only create a large number of new jobs, but the employment they offer is generally very satisfying. On top of offering jobs for the community, small business job satisfaction is high compared to working with larger corporations. A recent survey showed:
- 25% of small business employees are “very satisfied”
- 51% of small business employees are “satisfied”
Small businesses offer more than just job security. They offer meaningful and impactful jobs that make a difference in their local communities. When small businesses succeed, it strengthens the social fabric of the community. People come together to support their small business neighbors, which builds strong, connected communities.
Live Blood of Local Economies Integral Growth
Small businesses are the lifeblood of local economies. They are integral to small, local communities because they provide jobs and services for their neighbors. As small businesses grow, so do their contribution to society as a whole.
They often cut through bureaucracy to quickly implement solutions that help others in need, which is why small businesses are important for America’s economic health.
The support between small businesses and their local communities is mutual. Small businesses need the locals to help them thrive and succeed, while the locals appreciate the small businesses for providing jobs and services. This bond is special and helps both sides out in difficult times.
For example, when a small business is struggling, the locals can come together to help raise money or spread the word to get them back on their feet. This support system is crucial for small businesses and helps keep them going strong.
Small Businesses Quickly Adapt to Change
Small businesses are able to quickly adapt to changes because they are customer-oriented and understand the needs of the community. They are able to change their products or services to better meet the needs of their customers. In contrast, large corporations often take longer to make changes because they have to go through a long approval and sometimes a training process.
Small businesses are also able to quickly adapt to changes in the economy. For example, if there is a recession, small businesses can change their prices or hours of operation to stay afloat.
Small businesses also tend to bring in less revenue than larger corporations. This is because small businesses often serve a specific community or niche, rather than trying to appeal to a large audience. This can be a good thing because it means that small businesses are not as vulnerable to economic downturns.
Contribute to Local Taxes
Small businesses are important for a community because they pay back in local taxes that end up going to services for their neighbors. When a small business is thriving, it can pay higher taxes, including local property taxes. This money is then used for local services, such as the fire department and schools.
A thriving small business might raise the value of homes in a neighborhood. Which also generates more property taxes for the local government, so they can provide and improve their services for the community.
Small businesses play a big role in the local economy by contributing to sales tax as well. Sales tax is a charge on goods and services that helps fund local projects and services. When small businesses charge sales tax, it helps improve the local community.
New Ideas & Innovation from Small Business
Small businesses are often the birthplace of new and innovative ideas. This is because small businesses have to be competitive in order to survive and they need to come up with new products and services to stay afloat. Small groups of creative people are responsible for the creation of some of the world’s largest and most well-known companies. Facebook, Google, Coca-Cola, and Amazon all began as small groups of innovators.
Small businesses are often more nimble than larger businesses, which means they can quickly adapt to changes in the marketplace. They also understand the needs of their local community and can quickly implement solutions that help others in need.
For example, small businesses might create a product to help those affected by a local natural disaster.
Participation & Support with Locals
Small businesses are very prominent when it comes to getting involved in local and cultural life. They often support civil organizations and give back to charity groups within their region. This involvement helps small businesses strengthen their bond with the locals, and it also helps the community as a whole.
This involvement helps small businesses build a stronger bond with the locals, and it also benefits the community as a whole. In today’s world, small businesses are not only interested in their own personal growth and success. They are interested and involved in supporting and investing in their local communities.
Small businesses are the backbone of any community. They work together to support and make an impact on government policies, local areas, cultural venues, and more. By supporting small businesses, you are supporting your community and its economy.
They Help with Greater Diversity for Minorities
Small businesses provide more opportunities for women and minorities. This is because small businesses are often owned and operated by women and minorities. They offer a level of diversity that is not found in larger businesses.
A report from the 2020 Annual Business Survey (ABS), shows that 18% of U.S. businesses are minority-owned. While 20% were owned by women.
This diversity can be seen in the products and services that small businesses offer. Women and minority-owned small businesses are often more likely to offer products and services that cater to the needs of their community. This helps promote equality and opportunity for all.
As you can see, there are many effects and benefits that small businesses have with their local neighborhoods and economy. Now let’s take a look at the connections and comparisons of larger corporations and small businesses.
Connection & Differences Between Small & Large Businesses
There are several effects that small businesses have around and compared to larger corporations. From the way that they influence each other to the advantages of owning a small business compared to a corporation, let’s take a look!
Small Businesses Influence Corporations
Small businesses are often the innovators of the corporate world. They are more agile and able to pivot quickly in order to stay ahead of the competition. This can be seen through the way they use technology, new marketing strategies, and even their organizational structure.
In addition, small businesses act as a test market for larger corporations. By observing how small businesses are performing, big businesses can make data-driven decisions quickly and efficiently. This allows them to stay competitive in an ever-changing market.
Corporations watch and learn directly how smaller businesses handle agile management, innovations, and much more. Small businesses are an important part of the corporate world. They drive innovation, provide a test market for larger companies, and create jobs.
The Advantages of Small Businesses Over Large Corporations
Small businesses offer several advantages over larger businesses. Some of these advantages include:
- Higher threshold for risk
- Fewer legal regulations
- A better understanding of their customers
- Easier to provide personalized experiences for customers
These and everything we mentioned earlier in this article is just a few of the many benefits that small businesses have over larger corporations. Taking a business idea and running with by creating a small business is a great way to reap benefits and support locals.
Small Businesses Working Directly With Corporations
Small businesses shouldn’t be afraid of working with large corporations. In fact, they should work together as a team. By collaborating, small businesses can learn from the experiences and processes of the larger corporation. They can also use this as an opportunity to expand their customer base.
Larger corporations are interested in small businesses for a variety of reasons. Often, they are looking for new and innovative ideas that can help them stay ahead of the competition. Additionally, small businesses offer a level of customer service that is hard to find in larger corporations.
If you want to be the best business, you have to learn how to work together. This includes working with large corporations. There are many mutual benefits that they can provide for each other.
Small businesses have a lot of potential in today’s economy, as long as they remain vigilant. They are the lifeblood of the U.S. economy and should use their resources and scale to their advantage.
Small Businesses Support Corporations
Many corporations rely on small businesses in order to function. They provide larger firms with the supplies and components needed. For example, small businesses might provide a larger firm with a component for a new product. Without small businesses, the larger corporation could struggle to find a supplier for that component.
For example, automakers here in the U.S. depended on over 1,700 supplies in order to get all of the parts for them to create cars. This doesn’t mean that all 1,700 were small businesses, however, a large portion of them was.
Without the small business support, many larger firms could struggle to function. Outsourcing is a huge part of enterprises and is something many small businesses provide.
Small Business Tips & Local Economy
The small business community is an important part of the U.S economy, and small businesses should utilize their advantages to stay competitive in today’s market. Not only that, but small businesses are vital to the stability and growth of your local neighborhoods. They help the local communities in many different ways.
When working with corporate clients, small businesses should take advantage of this opportunity by collaborating together as partners; learning from each other’s processes, and expanding their own client base at the same time.
If you are looking for more small business tips and knowledge related to small businesses and finances, check out the rest of our blogs