Why small businesses are vital to local economies
We’ve previously discussed on this blog the personal reasons why aspiring entrepreneurs should start their own businesses. The Small Business Administration (SBA) defines a small business as companies with 500 employees or less. Today, we’ll delve into what those small businesses can do for their local economies.
According to Houston Chronicle contributor J. Mariah Brown, small businesses contribute to their towns’ and cities’ local economies in the following ways:
- They give local residents new job opportunities. They allow talented and innovative people to think outside the box and grow. “Larger businesses also often benefit from small businesses within the same local community, as many large corporations depend on small businesses for the completion of various business functions through outsourcing,” writes Brown.
- When locals shop at small businesses, they’re funneling money back into their communities with revenue, which they’ll pay taxes on. The Tax money is used for essential public services (e.g. fire departments, public schools, police). Since small business owners develop long-term relationships with local residents, customers will often display loyalty to those businesses.
- If a small business grows into a large corporation and its headquarters remains in the town or city in which it was founded, it can contribute even more job opportunities to the community. Brown cites Nike and Ben and Jerry’s as examples of small businesses that “grew to become major players in the national and international marketplace.”
Now is as good a time as any to start your small business. If you’re in the planning stages, contact us to discuss the benefits of incorporating.