Benefits of Small Businesses in a Community
Small businesses are the backbone of the community. There is usually an assumption that only large businesses are important to a community. But in an actual sense, many communities thrive because of the existence of small businesses. An SBA report showed that 44% of the U.S economy was generated by small businesses. In this article, we are going to look at the benefits of small businesses in a community.
How Can a Business Benefit the Community?
The following are ways through which small businesses benefit the community around them.
1. Create Jobs Locally
One of the major benefits of small businesses in a community is job creation. Small businesses create job opportunities for the local communities. They first employ the local people before employing people from other areas.
Small businesses tend to hire employees who live in the nearby community. People in the local communities are able to support their families from the salaries they are paid by small businesses.
2. Spur Innovation and Growth
Small businesses benefit the community by promoting innovation and growth. Since small businesses need to stand out, they innovative new ideas while competing to outdo large corporations. This way, they are able to come up with new ways of doing business.
Most small businesses are community-focused. Their main aim is to solve problems in the community. This way, they create solutions to problems affecting the community. In the end, they come up with new or improved products and services.
Also read: Small business tax offset and how it works.
3. Increase Tax Base
Small businesses also benefit the community through taxes they pay to the local government. For instance, businesses need to pay the local government to get business permits and licenses to operate.
Also, when customers buy products from a small business, they pay Value Added Tax which also benefits the government. These taxes are used by the government to provide the community with essential services.
4. Provision of Goods and Services
Among the other benefits of local businesses to a community is the provision of goods and services. That’s the role of any business. People can come and shop for whatever products or services they are in need of.
For any business to succeed, it needs to offer high-quality goods and services. Competition between businesses makes them to offer high quality services. If customers like the products and services, they become frequent buyers.
5. Improve Local Infrastructure
Small businesses benefit the community through improvement in infrastructure. Small businesses boost tax income through sales tax, VAT, and income tax for the local government. When more local people buy goods and services from small businesses, there is usually an increase tax payable.
Consequently, small businesses can pay more taxes to the local government. Then, the local government is able to improve the infrastructure like roads and electricity for the community.
6. Help in Revenue Generation
Small businesses contribute 44% of the U.S economy. The nominal small business GDP stood at $5.9 trillion in 2014. Most of the revenues generated by small businesses go towards building the neighboring community.
Besides, small businesses buy raw materials from the neighboring community. This leads to revenue generation for the community. Besides, when small businesses need services like landscaping, they hire other small businesses within the neighborhood.
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7. Shape Community Identity
Small business also benefits the community by promoting the communities’ cultural heritage. Small businesses in a community reflect the cultural background of the local people.
When you walk down the streets, you will find many businesses selling arts and crafts related to the community that lives around them. This gives brings out a unique flavor that is unique to the community that lives in the neighborhood.
8. They are Involved in Community Activities
Small businesses benefit the local communities through volunteer work, charitable donations, and participation in community festivals. For instance, small businesses sponsor youths in the local community in sports activities.
Small businesses also build the local communities through free training programs. By so doing, they impart the locals with gainful skills that can help them venture into self-employment.
9. Encourage Entrepreneurship
The other way small businesses benefit the community is by promoting entrepreneurship. Businesses depend on each other for survival. For instance, one small business needs the services of the other. For example, if a small business is processing milk, it will need milk suppliers.
As such, you will find many other businesses coming up to start supplying milk. This promotes entrepreneurship and the creation of many other businesses in the community.
10. Lead to Money Circulation
Small businesses benefit the community through the exchange and circulation of money. When there are business activities, money moves from buyers to sellers and from employers to employees. When there is the circulation of money, it becomes available for use by others. This leads to economic growth in a community.
Summary of Benefits of Small Businesses in a Community
Small businesses are very instrumental in promoting the values of the local community. Besides, small businesses benefit the community through the creation of job opportunities, spurring economic growth and innovation. They also lead to recognition of a community in the broader world, especially when small business is very successful.