Businesses are vital to the economy because they provide both goods and services as well as employment. Due to tough economic times prevailing across the world, many people have found themselves jobless. Trying to find a new job hasn’t been easy either. This kind of frustration has resulted in many people opting to try their hands on small business opportunities.
A small business could be anything from a saloon, a store, or even selling a stock of products. One advantage of small business opportunities is that they do not require vast sums of money to start which makes it easier for anyone to venture. Let’s look at how small business helps the economy.
According to the Statistics of US Businesses (SUSB), in 2015, the United States small businesses employed 58.9 million people who constituted 47.5% of the total private workforce. The report revealed that firms with fewer than 100 employees had the largest share of small business employment. The businesses employ local workers thus contributing to the local economy. Since they mostly hire people who cannot be employed by large corporations, the businesses tap unexploited talents that end up bringing new ideas as well as improving on the existing innovations.
Quickly adapt to changing economic times
Small businesses can adjust rapidly to changing times as compared to large corporations which have a lot of bureaucracies as well as responsibilities. Small businesses are usually customer- oriented, and so they understand the needs of the local community and customize their services and products. Most of the customers remain loyal to them even during an economic crisis. Such loyalty enables small businesses to stay afloat while large corporations crumble. Also, in times of economic crisis, small businesses have less to lose as compared to large corporations because they do not accumulate much revenue.
Contributes to taxes
A thriving small business generates high levels of revenue. Thus, they pay higher taxes. They also pay local property taxes and employment tax. Meaning, more small businesses in the local economy will boost tax income for local governments. Such money is vital in developing schools, repairing roads, and improving public services.
Provide access to services
Apart from employment opportunities to the local communities, they also improve the standard of living further by providing a wide range of services and amenities in the local area.
Growing to a corporation
Many small businesses do not remain small. Large international corporations such as Google, Amazon, Microsoft, and many more started small and grew big. Such corporates are a testament as to how a small business idea can change the world. Such companies are known to outsource services to small businesses thus helping them to grow.
Small businesses are essential to the growth of the economy because they can quickly adjust to the changing marketplace conditions and product innovation. They provide employment opportunities for people in the community, originate new ideas as well as improve on the existing innovations, and provide access to services and amenities in their locality.
Disclaimer: This content does not necessarily represent the views of IWB.