4 Reasons Small Businesses Are Important for the Economy
By Jeff Bardos
CEO, Speritas Capital Partners
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Big businesses may seem to form the bedrock of our nation’s economy, but that’s not quite true. In reality, small businesses are just as important, if not more so. Not convinced? Here are four reasons that small businesses are the foundation of the economy.
Big businesses provide some local jobs, but it’s really the small businesses in the area that provide most local employment. For every Walmart, there are hundreds of smaller shops employing local area residents.
Alternatives and Competition
Another reason that small business owners are critically important to the economy is that they provide both alternatives and competition to big companies. For example, a local farmer selling at a roadside stand, on his property, or through a farmers’ market could set lower prices than grocery stores, because he doesn’t have to pay to ship. It also provides local residents with a different choice of suppliers, and ensures that money goes directly to the local economy.
Why is failure important for the economy? Simply put, it means that business owners who fail learn the lessons they missed the first time around. It helps to build a more robust local economy and fosters stronger growth. It might sound odd, but failure ultimately builds a stronger local business network and more successful small business owners.
Small businesses differ from the big boys in quite a few ways. They have different budgets, different operating methods, and focus on different aspects of their industries. This diversity results in better economic stability. The more diverse the economy is, the better it can withstand fluctuations and changes.
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