Small businesses are very important to the local economy. Small businesses are emotionally rooted in the local community because of selling and buying with neighbors and friends. The importance of small and local businesses in the big cities and in the rural areas can be seen and felt in the economic benefits of buying and selling locally. In some villages and towns small firms a small firm is the only business that can easily survive while catering to a lower population. While in the bigger cities, the small businesses often provide a wide variety of inventory, or they have specialized in offering personalized and unique consumer experiences. Small businesses also offer new opportunities for employment and act as the building blocks for some of the largest businesses in the United States of America.
Growing Small Businesses
In the United States of America, a small business can be defined as any corporation, business, proprietorship, or limited liability company that employs 500 people or less. In the United States of America, small businesses make up more than 90 percent of all the businesses in the United States of America. In the United States, small businesses create over one million jobs, while some of the smaller businesses that employ twenty people or less add more than half of the jobs with more than one million increase. As of 2018, it is estimated that more than fifty million people are employed by more than twenty-five million small businesses in America.
Employing Local Workers
Small businesses assist the local economies by bringing innovation and growth to the local community where the local business is established. Small businesses also assist in promoting the economic growth of the local area by offering employment opportunities to people who might not be able to meet the criteria to be employed by the bigger companies. Small businesses will attract talented people who will invent and come up with new ideas and products or come up with new solutions for existing ideas. Bigger businesses will also benefit from small businesses that are within the local community, as much as bigger businesses will depend on small businesses to perform certain business tasks through outsourcing.
Adjusting to the Changing Climates
Numerous small businesses also have the ability to adapt and respond fast enough to the economic climate that is always changing. This is because most small businesses are mostly customer-oriented, and therefore, they’re able to understand the needs and wants of the local community. Numerous local consumers retain their loyalty to local businesses even during an economic crisis. Because of this loyalty, small businesses are capable of surviving tough economic times, which strengthens the local economies. Small firms also accumulate lower revenues compared to larger businesses, which means they lose less during an economic crisis.
The Taxes Contribute to The Local Government
When customers patronize small local businesses, technically, they are giving their money back into the local community. When the local businesses are thriving, they will be able to generate higher levels of revenue. This means the local businesses pay higher taxes, such as the local property taxes. The tax money collected is then used by the local fire and police departments, and also, the local schools get a share of the money. A small local business that is thriving can also boost the value of the property throughout the community. This will improve the bottom line of every homeowner while at the same time it’s capable of generating money for the local government through property taxes.
Small businesses also have an impact on the growth of the local economy through the collection of sales tax. Local small businesses are able to charge sales tax on the basis of their current locations, and they have the potential of becoming the backbone for the special taxation districts that are more focused on unique projects, including sidewalk and lighting projects.