How Does Small Business Improve the Local Economy?

For some time, you have probably seen a statement or a statistic by an economist or a politician stating the importance of small business to the local community. There is a good reason why you’ve been hearing about how valuable small businesses are for the Australian local economy. These small companies are driving changes throughout the country, starting in local communities, which is essential for the whole country’s continued success.

Small businesses generate new jobs, which makes them a valuable asset to the local community. They may not be at par with large corporations when it comes to generating money, but they also contribute to the strength of local economies. According to the Australian Bureau of Statistics, there are 2.1 million active trading businesses in Australia, where 97 percent have only less than 20 employees. This makes them big contributors of employment to the economy.

Small businesses are major contributors to the local economy by upholding growth and innovation. Employment opportunities are aplenty allowing individuals to earn income and improve their living conditions. Small businesses provide venues for job hunters who are not employable in large corporations regardless of their educational background and employment history. As a result, the unemployment rate decreases to a certain percentage.

Large businesses often benefit from small businesses within the same local community. Many of the large corporations depend on the small businesses in their local community for the completion of their various business functions through outsourcing. Small companies provide alternative services to bigger financial sectors to those from big banks. Big companies, the state and federal government, such as Commonwealth and others, continue to rely and increase their efforts to procure services from small businesses in order to boost growth.

Since small businesses are known to be customer-oriented, they can easily adapt to the ups and downs of the economic climate. Fortunately, small business are able to establish a good number of clientele or customers who remain loyal to their products and services. Customer loyalty is what makes these small businesses survive the so-called economic crisis. They find less difficulty in overcoming economic predicament because they have lower revenues to earn compared to large corporations.

Significantly, consumers are able to return money back to the community for as long as these local businesses are patronised. When small businesses are able generate good profit, they can pay for higher taxes which then contribute to the improvement of schools and vital services provided by the government.  Examples to these are police and fire departments.

There is a possibility for future growth. Some small businesses never remain small. With continued growth, they can compete with local and international players in the arena of commerce. Many large corporations started small and this is why small businesses should never be underestimated. With time and right management, small can turn into big business venture. Consequently, plenty of jobs can be generated and higher taxes are remitted to the government. In a nutshell, economic boom is attained people are enabled to improve their living condition.