Small businesses, start-ups, and entrepreneurs are some of the most important influencers of economic growth. This is because, in any economy, they represent more than 90% of all employers and create 60 to 80% of all new jobs, annually.
Big corporations might get a lot of attention when it comes to creating jobs, but small businesses employ more people and are more resilient when times get tough. Before coming up with something innovative that propelled them into growth, all big businesses once started out small.
Small businesses are the lifeblood that keeps the economy functioning. Lets find out how.
Employing Local Workers
Small businesses contribute to local economies by bringing growth and innovation to the community in which the business is established. It also helps stimulate economic growth by providing employment opportunities to people who may not be employable by larger corporations.
They tend to attract talent who invent new products or implement new solutions for existing ideas. Larger businesses also often benefit from small businesses within the same local community, as many large corporations depend on small businesses for the completion of various business functions through outsourcing.
Keeps Money in the Community
Local businesses generate revenue that is taxable by the community. They might need to pay local property taxes. These funds are then used to support local schools and public services. Their sales taxes also help support projects such as sidewalks, lighting, and more. Plus, that thriving small business helps the property values in that local community, which helps homeowners and the local government.
Local businesses also have an economic impact on the community by providing goods and services to big businesses in the area. Plus, the small business owner will rely on other local businesses for its supply chain or other services.
You Contribute to Local Taxes
When customers spend money on small businesses, as opposed to large corporations, they are investing in their communities through income and sales tax. The taxes they pay will:
- Support local schools
- Help improve the roads
- Allow the city to create parks and other community areas
- Fund social service programs
State and local tax revenues account for roughly 9% of GDP so it has a significant effect on the local government’s budget.
By giving residents an option instead of Amazon or other e-commerce vendors, small businessess can help your local government fund important improvements in the community.
Much attention is paid to big companies in business news. However, there are a lot of positive impacts when it comes to small businesses and the economy.