Why small business is good for the economy? 10 reasons why
Small businesses are the core of what the US economy is built on and in an in-depth look, it is easier to understand why they have such a huge impact. As the backbone of the economy, small businesses play a significant role by providing employment, generating revenue and incubating creative minds. The Office of Advocacy describes a small business as a company that has fewer than 500 employees. Small businesses are crucial for any economy and here are reasons that qualify the same.
Drive creativity and innovation
The number of patents and being applied for by small businesses is quite significant being in excess of 16 times per individual as compared to the larger companies. This means that small businesses are driving creativity and innovation in a huge way. People are getting innovative by the day and it is only through the small businesses that their innovations come to light. Small businesses allow individuals to churn out innovative solutions and products that drive the US economy and this is the biggest role they play.
Increase employment opportunities
64% of all new jobs generated come from small businesses which is an outstanding fete. Small businesses offer a continuous cycle of job openings since they employ over 56 million individuals. Small businesses like runrex.com are the best examples when it comes to the aspect of increasing employment opportunities. It is one of the small businesses that aims at allowing the creative minds to be less dependent on targeting employment and instead focus on creating employment through genius ideas.
Provide goods and services
Small businesses provide goods and services across the country in a fulfilling way. In retrospect, it is the small businesses that maintain the stability of the economy since they provide solutions to the everyday problems facing individuals. Small businesses complement large firms by providing elements and inputs that are needed by the larger corporations through the production line.
Contribute greatly to GDP
Small businesses contribute up to 46% of the nonfarm GDP of the US which means they are truly the backbone on which the economy runs. Small businesses through their operations and tax obligations, contribute greatly to the GDP and thereby impact the economy positively.
Offer women and minorities an opportunity
Achieving financial success for women and minorities is quite difficult and this is where small businesses make the most impact. Small businesses like ppchire.com offer opportunities to individuals irrespective of gender, ethnicity, race or political standing. This lowers the unemployment rate as well as bringing in more revenue in terms of taxes payable by the minorities.
Higher production value
Technical skills are put to good use within the small business industry which means higher production value is expected. Using technology and new waves of creative approaches always ends up in higher production value and this is the promise that small businesses bring.
Healthy competition
If the large companies were the only entities charged with providing the solutions to everyday problems, then the economy would never grow past what it had been decades ago. Small businesses offer healthy competition keeping the larger corporation on their toes which leads to the development of creative and effective solutions for the problems consumers may have. The beauty of having small businesses in an economy is that a better mousetrap is always in the offing.
Payroll significance
Small businesses pay a substantial portion of the US payroll more accurately 44% of the overall annual payroll. This means small businesses drive the economy unknowingly. As employees of these small businesses spend the monies they earn, they keep the economy running and this stands as the greatest contribution to the economy.
Role in export exchange
94% of the documented exporters are small businesses especially since they contribute about 26% of export value via the products and services they provide. It is the exports that keep the economy afloat owing to the foreign exchange revenue and this is one of the most important factors to note about small businesses.
Drive the entrepreneurial dream
The American dream is based on the entrepreneurial angle where people get to achieve their financial and life targets without having to be employed their whole life. Small businesses allow for people to grow their entrepreneurial dream and thereby establish their capacity as contributors to the economy. Small businesses like bitgale.com have brought a new meaning to the entrepreneurial dream by being the model of what an entrepreneurial dream is all about. By being an example of the businesses that have been started with the American dream in mind, it is a business that defines and encourages individuals to take charge. Kick-starting the American dream is important to the economy and small businesses aid the process by making it possible for entrepreneurs to live their dream.