Small businesses have a significant impact on their local economies and the quality of life. Taking the small businesses out of the scene outrightly, the area loses everything that makes it unique and charming.
They act as a driving force behind the joy and satisfaction of the locals. Saying that small businesses are the backbone of their local communities would not be wrong.
By the end of 2021, the number of small businesses has reached 32.5 million, making up 99.9% of the total business sector in the U.S. Small businesses are more than just an economic activity; they shape and impact the community in every sphere.
- Increase Community Economic Health
Local businesses tend to support other local businesses. An area eatery may need cleaning services, legal assistance, or an accountant to reconcile bills and process payroll. Many times, a localized company will deliberately patronize other local businesses to create a thriving local economy. Bolstering sales of their friends and neighbors creates strong community bonds and keeps money in the community, instead of sending it to corporate shareholders.
- They keep taxes close to home
Likewise, the way small businesses benefit the community is the taxes wind up back in the community. Taxes paid to small businesses, and the local taxes paid by small businesses, end up paying for community improvements such as schools, green space, public transit, and health care. Conversely, taxes paid to big corporations, or when shopping online, may not stay within the local circuit.
- They create jobs locally
Small businesses employ more people than large companies do. Since small businesses are just that, small, they need to hire many people to fill their company’s needs.
- Small businesses spur innovation and growth
New businesses are often created by people who get tired of working for or owning large companies. They start their own little company where they get to work with the people they enjoy working with and sometimes even choose their hours.
New business owners tend to try harder than others at innovating new ideas that will benefit themselves and their employees.
- Promote Environmental Awareness
Small businesses can also promote and contribute to environmental awareness in many ways. According to the Environmental Protection Agency (EPA), multiple small businesses located within walking distance of each other or near residential areas can reduce car pollution and encourage walking. This makes streets safer for both pedestrians and drivers.
Small businesses also tend to adopt environmentally friendly practices, such as using more recycled materials, as well as reuse and update old buildings to include more sustainable features.
- Increase City Revenue to Increase Community Improvements
Local businesses pay local taxes which means more revenue goes back into the community. That additional revenue means more money for improvements to city roads, schools, and other needs. While shopping online is easy, it doesn’t keep tax revenue local. This is a problem many small communities face.
- Diversity Within the Community
Small businesses provide opportunities for many people, including women and minorities, to achieve financial success, according to Lumen.
The U.S. Senate Committee On Small Businesses & Entrepreneurship says that women-owned businesses have been the fastest growing segment in the U.S. economy for the past two decades, and they’re growing at twice the rate of other businesses with 10.1 million female-owned businesses employing 13 million Americans and generating $1.9 trillion in annual revenues in 2008 alone—that was during the height of the recession!