Just How Important Are Small Businesses?

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Small businesses provide 75% of new jobs in the U.S. They also offer 40% of jobs and pay 44% of payroll taxes. The smallest companies create 13 times more patents per employee than large companies. 99.7% of employer firms are small businesses. If you have an idea for a startup, the first thing to ask is should this be a startup at all, or should it be a small business? There are dozens of reasons why you must support small businesses

We’ve discussed them below;

Benefits of Small Businesses

  • Create more job opportunities

Startups play a key role in the creation of jobs. This is especially important during a recession when unemployment is high. The U.S. Small Business Administration states that small businesses create two out of every three new jobs in the country. That’s a huge number, now that startups comprise 98% of all businesses in the U.S,  in accordance with SBA. According to SBA estimation, one in every two employees in the U.S. owns a small business.

  • Contribute to the development of the local economy

Small businesses also benefit the local economy by purchasing goods and services from other local companies, creating a cycle of economic growth within the community. Local businesses are more likely to support community programs

Thanks to small businesses, consumers have a chance to support their local community and keep money within it. Money spent at small businesses can be re-spent in the local economy rather than being sent away to corporate headquarters or investors. This helps build a stronger local economy and encourages further business development and growth.

  • Highly flexible

Small businesses can be more flexible than large corporations. Some small companies can make changes quickly, such as implementing new business processes or shifting directions in response to market demands.

Besides, when starting,  you have everything to gain and little to. You don’t have to worry about corporate politics, making the numbers on a quarterly report, or pleasing anyone but yourself. If there’s a project you want to undertake or a new way of doing things you want to try, there’s no one standing in your way except for your own beliefs and fears.

  • Easy to change direction

With a startup, you can opt for a different direction with ease. If one part of your business isn’t working for you, it’s easy to shut it down and start over. Because you’re not tied down by large overhead expenses or investors’ expectations, it’s easier for you to make decisions based on what feels right for you and your business.

  • Innovation

Small businesses can innovate faster than large corporations because they typically have a flatter organizational structure and less bureaucracy, allowing them to make decisions with greater agility.

Essentially, one thing is for sure- big companies are not good at innovation. Although they seem like a great place to find innovation due to the availability of resources, they struggle with innovation. But resources are a double-edged sword. The more important a project is to a company’s future, the more risk-averse they tend to be. To get an idea of how this works in practice, just look at the corporate world’s record in adopting new technologies: it’s pathetic. Innovation has little to do with funding. When it comes to coming up with new ideas, you can’t beat small groups of clever people working on problems that interest them.

Key Takeaway

Starting a small business is the best decision. That’s because startups contribute to the growth of the local economy, lead to job creation and offer personalized customer service. Because small companies have fewer employees, customers often receive customized services that a large corporation may not be able to provide. Besides, they promote an entrepreneurial spirit. Working for a small company can empower employees who want to contribute on many levels of the business and grow professionally in ways that may not be possible in larger companies.

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