Among laymen, it’s common to think that large companies are the driving force of innovations and progress. And it’s understandable. Huge corporations and conglomerates have incomparably larger turnovers and as such, pay higher taxes. So what is the part of small businesses in economics? Do they matter?

Small businesses are normally associated with selling goods and services to the people of local communities. In a small town, it may be a fancy store a few steps away from your house selling all the necessities you may think of. In a rural area, the only type of business that can survive under the conditions of moderate demand. In large cities, however, small stores and services are usually associated with a better user experience.

However, the contribution of small businesses to local economies is larger than that. Here are 6 ways how small companies can boost the economic development of local communities.

Provide Job Opportunities for Local Employees

Unlike large corporations that can afford to recruit the best and the brightest from all over the world, small businesses tend to hire local talents and grow them into full-fledged professionals. Trying to compete in the HR market, they normally have milder requirements and prefer to invest in an employee’s development and growth. Also, they never seek another gear wheel to a large mechanism as corporations often do. On the contrary, they look for creative ideas, non-standard solutions, and ambitions in their candidates that only stimulate education and healthy competition in the community.

Adapt Better to Changing Economic Situations

Recent COVID-19 lockdowns across the world have already proven this theory. It’s true that many small businesses collapsed and never managed to recover. However, many of them found the courage and ways to transform their services into something new and even attract better revenue. This is largely connected with the necessity of small businesses to be extremely client-oriented and stay in the loop of the local needs and demands.

Furthermore, people don’t tend to give up on their favorite services and suppliers. Therefore, they’re likely to continue supporting small entrepreneurs even in the circumstances of a crisis.

Whip Up Innovations and Growth

No secret that the market economy is about a fierce competition where the strong usually devour the weak ones. Therefore, small businesses have to be more creative and find non-standard solutions to be able to compete with other businesses and stay afloat.

It’s quite common to think that unlimited resources allow bigger companies to bring to light new inventions and drive innovations. And while they do, usually it’s small start-ups that are responsible for new technologies and innovative solutions. Simply, because they have to stand out somehow.

Accumulate Tax Payments Within Their Local Communities

One of the most important ways how small entrepreneurs help local economies to grow and prosper is by paying taxes to their budget. This money is then spent to renovate schools and hospitals, repair the roads, and improve the life of the town and the community they live in. As local residents themselves, it’s in their interests to be open and honest about their revenues and pay the taxes in full.

Participate in Local Life

The relationships between small business owners and their clients are a complex ecosystem where everyone gets the benefits. As a small entrepreneur, you can’t survive by offering mediocre products or services and a poor user experience. Therefore, local businesses normally strive to be highly client-oriented, as well as make their contribution to local public life. They may make donations, participate in local celebrations, and offer individual discounts. As a result, small business persons see their mission in helping the town and providing impeccable customer experience, while its people tend to support them by purchasing local goods and using their services.

Grow into Corporations

Not every small business stays small forever. Some manage to increase their volumes, hire new employees, gain new markets, and grow into large corporations as their predecessors did. Take Steve Jobs for one. Before his business grew into a huge, world-known brand, he was making his first computers in the family garage. And he wasn’t the only one. Nike, Disney, Amazon, Hewlett-Packard, Google, Microsoft, and many other major companies started as small businesses some years ago. For the local economies, it meant more job opportunities, more tax payments, and new markets.

Bottom Line

They may be unknown for the entire globe, but the influence of small businesses and their contribution to local economies are colossal. They create new job places, attract and train young talents, and drive innovations. They also serve as a huge leg-up for larger companies and corporations by fixing their pain points as outsources. Unlike common opinion, they’re also quite adaptive to changing economic conditions – if they properly calculate the risks and choose the right development strategy.

So, if you’re stalling with starting a small local business because you want to play big right away, think again. Most large corporations were small gigs before they turned into well-known multi-billion businesses. Just make sure that a cheap business plan writing service you’re likely to hire covers all the details of launching a small business in your locality.