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Why Small Businesses and Entrepreneurs Are the Heart of America’s Economy and Spirit

While we often think of major corporations when it comes to driving innovation and competition in the United States, small businesses also play a vital role in our nation’s economy and boosts the overall spirit for our small communities. These locally owned and operated businesses scattered throughout main streets in our hometowns make up two-thirds of new jobs in the country.

Even though the overall share has gone down in recent years, small businesses still make up around 44 percent of all economic activity in the U.S. That is an impressive number when compared to the number of major corporations and brands located in big cities all over the country.

Why Are Small Businesses So Important to Our Economy?
It is estimated that within the last 20 years, small businesses throughout the country have been responsible for creating as many as 64% of all new jobs in the United States. Without the drive and dedication that small businesses provide, millions of people would be unemployed, and our economy would suffer a terrible fate. While many would argue that the economy is currently in an unfortunate place, we can be assured that the situation would be much worse if it was not for the many small businesses in our land.

Here are just a few reasons why small businesses are necessary to our economy and our communities.

Small Businesses Are Essential for Economic Growth
Small businesses can bring innovation to their communities regardless of their industry. They are essential for economic growth because they are often more in tune with consumers and the general public than giant corporations. For instance, they are more aware of products and services needed by residents in their area. With fewer hierarchy levels to move through, small businesses and those who run them tend to be more willing to give new and inventive ideas a try. All of this willingness to be more innovative can be a massive benefit to the community the business serves and plays a significant role in economic growth for the area.

Small Businesses Employ More Local Workers
One significant way in which small businesses contribute to the economy of local communities is by employing local workers. While they help bring more innovation and growth to the area, they also stimulate the economy by providing more job opportunities to those who may not necessarily be employable by giant corporations. They also create new jobs in small towns and rural areas far away from the more prominent industrial parts of town. That can make it much easier for those who want to work but have limited transportation options.

Small Businesses Can Adapt to the Changing Climates
Small businesses and those who run them can adapt quickly to the ever-changing economic climate. That is thanks in part to the fact that small businesses are highly customer-oriented, and their owners have a better grasp on the needs of the communities they serve. Most local customers will remain loyal to their local small businesses, even amid an economic crisis. This type of loyalty means these businesses are more capable of staying relevant even with less revenue than many giant corporations with fewer loyal customers.

Small Businesses Help Local Governments Thrive
Anytime consumers patronize small businesses within their community, they are not only helping out that specific business, but they are also giving money back to their local government. A local business that is thriving will generate exceptional revenue. As a result, the business will pay out higher taxes, including their local property tax. That money is then used for all the community’s local needs, such as paying for schools, road maintenance, and the local fire or police department. A successful small business can even help improve the property values within a community, which can greatly benefit everyone who lives in the area.

The impact a small business can have on a local economy’s growth can also be helpful in sales tax collection. It can help fund special projects like lighting for sidewalks or renovation costs for historic buildings that the community may not have otherwise been able to afford. All local businesses must change a sales tax based on the area they are located in. That is often the backbone of special taxation districts whenever a company is wildly successful.

A Successful Small Business Does Not Have to Stay Small
A small business does not have to remain small, especially if an innovative idea helps the brand grow. More giant corporations that once started as small businesses, such as Nike, later became leaders in their industries. Whenever a small business grows into a much larger and more successful corporation, it will usually stay in the community where the company was initially established, or have its main headquarters there. That can help propel a community further and create an abundance of new jobs to attract more people to the area. It can stimulate the local economy by creating a favorable market to develop even more successful small business ventures.

Small Businesses Are Highly Adaptable
Since small businesses are so connected to the communities they serve, they are usually more adaptable to their local economic climate changes and challenges. As the demands of their customers start to shift, these businesses often find themselves located on the front lines, making the necessary adjustments to ensure their customers remain happy in a way that more giant corporations could never do. As a result, customer loyalty for smaller businesses is often much more vital. In times of economic turmoil such as the current pandemic, many consumers will make the extra effort to show support to these small businesses to ensure they stay afloat during hard times instead of getting their goods and services through a giant corporation.

The Three Main Ways a Small Business Contributes to the Local Economy
Small businesses can sometimes be overlooked when it comes to economic news, as more focus tends to be on the state of larger corporations. While they may not generate the same level of revenue, they are still a vital part of our economy and should not be overshadowed by the more prominent brands.

There are three main ways that small businesses contribute to the economy. They provide us with the opportunity to gain financial independence, encourage innovation and creativity within industries, and help create more employment opportunities, especially in rural regions.

It is vital that all small business owners pay attention to their worth and never forget how much they can impact their local communities and the world overall. All small business owners need to realize how they play a significant role in keeping the American Dream alive.

To get through the difficult stages and make your way toward success, a small business owner must focus on their money and time management and be sure to hire the right people for the job. Marketing is also a key component of success when competing with larger corporations.

It is an excellent opportunity for one to pursue their dreams, but there are challenges that we all must face along the way; and many times, people will start to lose hope when times get tough.

It is essential not to lose hope, even if you have very few followers. There have been many instances where small businesses are born from ideas that seemed too outrageous to catch on to. But if it were not for those impossible dreams and the willingness of those one-time small business owners, we would not have many of the major companies we are so familiar with today. Brands such as HP, Google, Amazon, and even Disney were all innovative ideas backed by strong-willed entrepreneurs who refused to give up. Because they would not take no for an answer, we now have many of the products that we cannot seem to live without.

Are You Ready to Start Your Own Business? Contact the National Association for the Self-Employed Today
It can be very easy to underestimate how important a small business is when you only look at its statistics. But by taking a step back and looking at the bigger picture, you can get a better idea of what the company can offer the community right now and in the future. Boosting the economy, adding jobs, and bringing products or services needed in a small town or rural area are just a few ways that small businesses can impact our economy and the world we live in.

If you are ready to play an essential role in our nation’s economy and start your own business, contact the experts at NASE. Our team is available to help up and coming entrepreneurs run a better business. We are available to answer questions you may have and can assist you with getting your small business started in the right direction. Contact us today.