If there’s no growth in a country, why are small business important to a country’s economy? Growth starts with a thriving small business community. A city with a large number of failed businesses, many of which have had to close their doors for good, is the most obvious sign that an economy is past its prime. People are not moving in or expanding their businesses and instead are contracting. Communities of people and businesses that grow together die together.
Why are small business important to a country’s economy
Small business are important to a country’s economy. The contribution of small businesses to the growth of a strong economy is immeasurable. Small business owners have given rise to many industries, filled an abundance of job opportunities for their local communities, and contributed to the overall innovative and entrepreneurial culture of their country.
They encourage competition.
(why are small business important to a country’s economy) Small businesses often enter a market and introduce new products or services that introduce competition and innovation into a market space dominated by large corporations. For example, small convenience stores in neighborhoods offer consumers a convenient place to shop for their daily needs. The alternative for many consumers is a gas station with a limited selection of items or driving several miles to a supermarket.
They give a country’s economy flexibility.
When there is a change in the economic climate, small businesses can easily adapt to new circumstances. This is because they have fewer assets and staff than large companies and so are less vulnerable to economic downturns.
Why are small business important to a country’s economy
In times of economic downturns, small businesses often provide much-needed jobs in areas where large corporations may not want to work. This gives the economy more flexibility in terms of how it can react to changes in consumer demand and the availability of resources.
They help a country grow more diverse.
A country that relies exclusively on big businesses to grow its economy will not do as well as one with a healthy mix of small and large companies. For example, if a country has only large manufacturers, it risks becoming a one-trick pony.
Its economy is vulnerable to the ups and downs of that industry alone. Small businesses can help diversify an economy by providing new products and services that are not available through larger companies. This helps ensure that the economic engine has many cylinders firing, providing stability and growth even when some sectors slow down.
They maximize the use of scarce resources
Small businesses are important because they maximize the use of scarce resources. The small business owner has to solve problems and make decisions in a world of limited resources. For example, you can only afford to buy so much equipment, train so many people, or hire so many employees. These constraints force the entrepreneur to be efficient.
Small businesses also help an economy by maximizing competition. By increasing the number of businesses in an industry, there is more competition for consumers’ dollars. This forces each business to become more efficient, especially if it is competing with other small businesses that are particularly efficient at meeting the needs of their customers.
Small businesses contribute to local economies by bringing growth and innovation to the community in which the business is established. Small businesses also help stimulate economic growth by providing employment opportunities to people who may not be employable by larger corporations.
Small businesses create a lot of jobs.
The fact is that small businesses have created 64% of net new jobs over the past 15 years, according to the Small Business Administration (SBA). That represents about 25 million net-new jobs in America.
In most major U.S. cities, more than half of all employers are small businesses. In cities like New York, Chicago, and San Francisco, small business accounts for more than 75% of all employers.
Small businesses make up a large part of the country’s economy in terms of jobs and gross domestic product (GDP).
According to the SBA, in 2007, there were approximately 7.8 million employer firms in the U.S., with 5.7 million having fewer than 500 workers, and another 1 million or so having fewer than 20 workers — businesses that would qualify as “small” by federal standards.
Small businesses keep local economies healthy.
(Why are small business important to a country’s economy?)The biggest reason that small business are important is that they keep local economies healthy. Small businesses make up the majority of businesses in the United States, and they employ half of all workers in the country. They also create two-thirds of all net new jobs over the last decade, according to the Small Business Administration.
Another study found that small businesses created 65 percent of all new jobs over 16 years; however, most small businesses have only one employee. These are called nonemployer firms, which are typically run by self-employed individuals who operate their own companies without hiring employees.
Small business owners pay themselves and their employees with revenue generated from sales and services provided by their firms, which keeps money circulating within the local economy. This provides economic stability for communities and lowers unemployment rates.
Small business owners have a big impact on the economy.
(Why are small business important to a country’s economy?) They make up most of the workforce and have a hand in creating jobs, producing exports, producing new products and services, and advancing technologies. They also add to their communities by supporting art, music, and sports programs.
To help small business owners grow, we’ve created a list of 10 things they need to do to help their business succeed.
1. Get organized
2. Stay focused
3. Create a plan for success
4. Keep your customers happy
5. Use technology to your advantage
6. Get advice from other small business owners
7. Hire good employees
8. Make it easy for customers to buy from you
9. Know your competition
10. Make sure you get paid
Small businesses offer unique goods and services.
(Why are small business important to a country’s economy?) Small businesses provide unique goods and services because they can focus on specialized markets. When it comes to products, small businesses are often the first to introduce new things to a market. They do this by being nimble and understanding the needs of their customers.
Unique Products Result in Job Creation
Unique products produced by small businesses are often the result of innovation. Innovation requires investment in research, development, production, and marketing. These investments result in job creation for workers who are hired to help produce these products and market them to consumers. In addition to direct job creation from the production of new products, small businesses also create indirect jobs resulting from the sale of their good and services. Many of these secondary jobs are created when other companies, such as retailers, seek out these new products to sell in their stores.
Small businesses help drive innovation.
(Why are small business important to a country’s economy?) Small businesses also help drive innovation in the U.S., with companies under five years old accounting for all net job growth in the country, according to a study by the Kauffman Foundation.
Here are some ways small business owners can help their own companies grow:
Rethink your strategy: Many small businesses start with a great idea, but then get so caught up in daily operations that they lose sight of their long-term goals. Reexamine your mission statement, core values, and goals regularly to make sure you’re on track.
Hire right: As your business grows, you’ll need more employees to handle increased workloads, but don’t just hire anyone who can do the job ask yourself if they’re also passionate about your company’s mission and values.
Get social: More than three-quarters of small business owners say social media is important for building brand awareness and growing sales, according to an online survey by The Manifest. A good place to get started is with LinkedIn share articles about industry trends
Customers have an advantage with small businesses.
For customer service, size matters. And smaller is usually better. (why are small business important to a country’s economy)
While small businesses may not have the resources of a major corporation, they often have a decided advantage over their bigger competitors when it comes to customer service.
That’s because customers are more likely to be treated as individuals and given personal attention. They don’t get channeled through an impersonal call center or automated phone system. Instead, they can speak directly with the owner or a manager and have their problem solved immediately.
“It’s a different relationship,” says Mary Beth Brazelton, owner of the 7-year-old GlamourpussNYC, which sells clothing and accessories for women online. “We’re all one phone call away.”
Brazelton says she receives calls each day from customers and answers everyone herself. She says her customers appreciate that they don’t have to go through layers of customer service representatives who don’t know them or understand their needs.
Small business has some unique values that distinguish them from larger businesses. These values vary from networking to giving back to the community, but all small business owners share a sense of pride in promoting the general well-being of the locations they call home.
Small business contributes thirty-six percent to the gross domestic product of the country. Small businesses contribute to the job opportunities of a country because they are the potential to employ more people.
Furthermore, small business owners can help in creating more job opportunities for people that are about to get jobs after graduation. Small business requires lower costs for operation when compared to big companies. Most firms find themselves spending less on salaries and operational needs. On the other hand, big companies employ only a few people while considering the number of employees they have.