Five Reasons Small Business is Important to an Economy

In any town you live in, small or large, you can see businesses everywhere, but the one thing you will always see, anywhere in the country, is a small business. This is because they are the lifeblood of the American economy. The following are only five of the reasons that this is true.

They employ a lot of people
It has been estimated that small businesses in the United States are responsible for half of the jobs that exist. This is an enormous amount of people who are dependent upon small businesses for their income. Low unemployment is an important aspect of the economy, so keeping small businesses across the nation healthy means keeping the economy healthy.

Money circulates locally
Small businesses have a tendency to keep more money circulating in the local community. Business owners live in the community they are operating in, so much of their profits go right back into the local economy. This creates a strong, healthy, local economy, and when this is replicated across communities throughout the country, then you have a strong national economy as well.

Small businesses are sensitive to local issues
Because a small business owner often lives in the community he or she serves, they are more apt to understand local issues and respond to the concerns of people who are their neighbors. This is not as common with larger corporations. Big business entities often pay little attention to anything other than their profits. Unless there is a direct effect on the bottom line, they are not likely to get involved in local problems and other community issues.

Today’s small business is tomorrow’s big business
Although small business employs half the nation’s workforce, the other half is employed by big business and the government. However, it is the small business owner that will become the future large company. The financial rewards that exist for a successful small business owner are large, and this has inspired many entrepreneurs to start a business and attempt to create a large enterprise over the course of many years. One example of this can be found with CEO David Kiger of Worldwide express. This entrepreneur started a company on the idea that he could help companies save money on shipping. Today, Mr. Kiger’s company generates over 500 million dollars in annual revenue.

They motivate people to work hard
Hard work, along with productivity, is an essential element in the American economy. Although it is common to see people working hard all over the world, it is here in the United States where the productive value of your work can be seen and measured. If you can work hard to produce something others value greatly, it is possible to reap large financial rewards. This incentive is more pronounced in a small business than with large corporations.

The importance of small business to both the local and national economy is difficult to dispute. Anyone seeking to improve local and national economic conditions would be well advised to focus on efforts to help small businesses grow and prosper.