The SBA defines a small business as one that employs 500 persons or less and according to the Bureau of Labor Statistics; small businesses are representative of 99.7 percent of all employing firms and have created 64 percent of all new jobs since 1995. Small businesses also pay approximately 44 percent of the entire U.S. payroll paid privately. It should be no surprise then how vital they are to their communities.
Although small businesses aren’t likely to generate as much monetarily as most large corporate entities; they are vitally important, significant contributors to the very foundation of local communities by providing employment opportunities locally (Chron.com). They are the very stepping stones to larger American corporations.
If you don’t realize the positive impact that your small business has in your local community, consider the following:
Local Governmental Offices and Schools
- When local businesses are thriving, they are generating higher degrees of revenue. If they are profitable, they are also paying higher local taxes that go to improve various aspects of the communities they serve. This revenue is then redistributed back into their neighborhoods for police, fire protection, shelters and schools among other services.
- When local consumers make purchases for tangible goods or services from these local small businesses, they too are giving the money back to their communities.
Contribution to Local Economic Growth:
- Small businesses contribute economically to their local communities by attracting innovation and therefore, community growth. These businesses lend options to those who are often not considered as employable by many of the larger corporations.
- They often attract new talent to their communities who in turn may provide new solutions and inventions that will allow room for implementation of new solutions for existing industry challenges.
- Because corporations depend on smaller businesses as an avenue of outsourcing, providing a way for them to complete projects with the much-needed expert services required to complete projects in a timely and impressive manner.
Ability to Adapt Within Changing Economic Environments:
- Small businesses seem to possess an uncanny ability to adapt and respond to economic environments that often change very quickly. The fact is that these small businesses are well known for their genuine desire to keep their customers/clients satisfied and are always willing to go the extra mile to make it happen. As a result, customers/clients are often far more willing to remain loyal to their preferred local small business, especially amid an economic crisis. Smaller companies have less to lose than a large corporation, so a smaller business combined with strong customer/client loyalty has more of an opportunity to help a local community weather an economic crisis.
Future Growth Potential:
- Not all small businesses stay small. There is a myriad of large corporations that began as small businesses only to grow into major players in their industries, some on global levels. Microsoft is a perfect example of a small business that started in a garage in middle America and eventually changed the world as we knew it.
Small businesses that eventually transform themselves into large corporations will often remain headquartered in the small communities where they had established themselves. In doing so, they continue to offer a growing number of employment opportunities which will extend the monetary stimulation of the local community and its economy.
Never underestimate the power of your small business in your community. Every positive step that you take in good economic climates will make a difference in your community regardless of what happens in the long run. Work now to ensure that you create a strong and loyal customer/client base. The rest is very likely to take care of itself in hard times, and you will remain a thriving and robust part of your community.
At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:
