In a world of corporate businesses and monopolization of markets, you might be wondering what purpose your small business has on the economy.
The answer is more than you think. A healthy economy needs small businesses to thrive, as when this happens, the bigger picture of the community thrives, too.
But what role do small businesses play in the economy? Let’s find out.
Small Businesses Support The Community
While small businesses are often local and niche, there are many more out there than you think. Consider the fact that there are 28 million small businesses within America alone, and they employ 55% of the workforce.
These small businesses are also responsible for 54% of the transactions within a year.
Small businesses have delivered 66% of all net jobs within the economy since the 1970s. Without these jobs made by small businesses, there wouldn’t be as much stability in the American workforce as we see today.
Don’t forget about the franchised businesses here - as these have been thriving for the past few decades. These include restaurants, cafes, retail stores, and more across the country. It is estimated that franchised businesses offer 8 million jobs, which account for almost 40% of retail sales.
As you can see, small businesses provide an incredible amount of jobs for their community. Without these businesses, unemployment rates would be sky-high, with the majority of us relying on corporate jobs.
Small Businesses Create Meaningful Jobs
Not only do small businesses offer plenty of new jobs available for the American workforce, but they also improve job satisfaction and keep their employees happy and fulfilled.
This is a common issue that we have seen across corporate jobs, where the bosses are too far up the corporate ladder to care about their employees at the bottom. This is not true for all corporate businesses, but it has become big enough of an issue that it’s widely known.
Small businesses are a different story. The corporate chain from boss to employee is much shorter, and therefore easier for complaints to reach the top. Small business owners tend to make work more enjoyable for their employees, with benefits, helping to feel heard, and more.
Working for a small business means that you’re more likely to have a good relationship with your boss, creating more meaningful and fulfilling jobs. These lead to a lower employee turnover rate, as well.
Small Businesses Offer Independence
Some people simply do not get on with working under someone, making it difficult for them to hold down a job and earn a living. This can be difficult to manage, especially if you have bills coming in and no way to pay for them.
Here is where some will turn to create a small business. It gives them an income and ensures that they are not unhappy with their job. These people can then hire others and create new jobs for others.
Small Businesses Hold Their Own Against Corporate Companies
Corporate companies have a bad habit of spreading their businesses all over America, taking land and resources away from small businesses that might struggle as a result.
Corporate businesses will pop up around the country, sharing the same corporate culture and values no matter where they are located.
However, small businesses holding their ground against these corporations prevent them from staking their claim on local land. No pharmaceutical company is going to put a pharmacy right next to another one run by a small business owner - that’s bad business!
So, small businesses are able to keep their customer base in their local area, showcasing the values of the location.
Local restaurants will offer local specials, and local pharmacies will provide local businesses with a place to sell their products like homemade crafts or T-shirts.
Small Businesses Help Other Small Businesses
A community of small businesses is a lovely place to be since you see everyone pitching in together and rooting for one another to succeed. This offers a lovely sense of community and gets everyone together.
You don’t see this kind of relationship between corporate companies, since the bosses are far too high up the corporate ladder.
The community might also be willing to spend more on items from small businesses since they want the owner to succeed. Small businesses bring out a great sense of community and pride among locals, which can then improve morale and relationships around them.
Small Businesses Turn Into Big Corporations
While some small businesses will remain small, others will turn into the corporations that we have been comparing to. It is important to remember that big corporations are not the bad guys here - they’ve just been successful enough to grow exponentially.
Even the likes of Nike and Ben and Jerry’s started off as small businesses, and now look at them!
The world needs big corporations to make more jobs, provide people with supplies, and feed money back into the economy. Without small businesses, there wouldn’t be anyone to grow into these shoes!
So, we need small businesses to keep replenishing these gaps in the market. Not all small businesses will succeed at this, but these businesses will help the economy grow in other ways.
How Important Are Small Businesses To Local Economies?
Short answer: incredibly important. Small businesses create jobs, improve morale, and bring money into the local economy. Without them, people would be fighting for the limited jobs available, big corporations would monopolize the market, and jobs would often be unhappy.
People like shopping at small businesses as it gives them a way to prevent money from going to big corporations like Amazon, Target, and others.
Small businesses also bring in more money to local economies rather than corporations, who will bring money into wherever their headquarters are. This means that the local community can thrive instead of customers’ money going elsewhere in the world.
Summary
Are you considering starting your own small business? We say do it! Small businesses make up a huge percentage of sales and jobs in local economies, and they support economies in more ways than one.
You’ll be offering new jobs to local people, and will hopefully create meaningful jobs that your employees enjoy rather than dread.
You’ll also help to create a sense of community throughout your local area, and give people an outlet to buy things without giving money to corporate companies. Who knows? Maybe you’ll even succeed and grow into a large business one day, too!