The overall importance of a small business to the local communities is rooted emotionally in selling and buying with neighbours and friends. The importance of these small firms in big cities and rural areas can also be seen in economic benefits associated with shopping locally. In some villages and towns, small businesses are the only types that will survive when serving reduced populations.
In big cities, a small business will often provide an inventory that is more diverse or specialises in offering personalised or unique customer experiences. Small businesses also provide opportunities for employment and serve as the foundation of the largest corporations in the UK.
Employing Workers Locally
Small businesses significantly contribute to local economies by bringing about innovation and growth to communities where the small company is established. Small businesses also assist with stimulating economic growth in the way of providing opportunities for employment for individuals that are not regarded as employable by the bigger corporations. Small businesses usually attract the right type of talent to implement innovative solutions or invent new and unique products to add to an existing idea.
The larger companies also benefit from these smaller businesses in the local communities. This has to do with many of the larger corporations depending on these smaller businesses to complete different business functions through the process of outsourcing.
Adapting to Economic Climate Changes
Many small companies are able to adapt and respond to changes in economic climates. This has to do with the fact that small companies are in most cases customer-orientated and have an understanding of what their communities need. Most of the customers that are loyal will stay loyal when it comes to their favoured small businesses, even when the economy is facing a crisis.
This type of loyalty will mean that most of these small businesses can remain afloat during difficult times, which helps to strengthen local economies even further. Small businesses also collect less revenue when compared to the big corporations, which means that they also have a lot less to risk or lose when faced with an economic crisis.
Contributing to Local Government through Taxes
When consumers support local businesses, they are giving back money into their own local communities. The thriving small local businesses usually generate revenue at high levels, which means these businesses are paying higher taxes, which includes property taxes.
These funds are then used for local fire and police departments, along with schools. Small and thriving businesses are also able to improve the values of properties throughout the community, which helps to improve the bottom line of every homeowner while generating even more taxes for local government.
The impact of small businesses on the local growth of the economy is also associated with the collection of sales tax. The local companies charge “sales tax” according to their locations, which can become the backbone of the special-taxation districts that are aimed at unique projects like pavement and lighting projects for improving historical shopping districts, like Fleet in Hampshire, or to attract more customers.
Growing Small Businesses into Corporations
Many small businesses only start off as small. Large corporations like Ben and Jerry’s and Nike all had humble beginnings and then expanded to become important players in both the international and national marketplace.
Many of the computer-industry leaders also started off as “tinkerers”, where they first worked on hand-assembled machines from their garages. Amazon and Microsoft are classic examples of how small business ideas ended up changing the world. Many of the small businesses that turn into large corporations usually stay in the same community where the business first began.
When some of these large corporations are headquartered in local communities, this also helps to provide employment opportunities and to stimulate these local economies, which creates markets that favour the prospect of developing more small businesses.