Why We Care About Small Businesses
How Small Businesses Impact the Economy, Community, and Individuals
We love working with small businesses. By definition, small businesses are small, which enables us to avoid a lot of the hurdles that come with working with larger organizations. Projects are completed more quickly, the vision is clearer, and we get to see the joy of the person whose dream has just been solidified into a logo or website. It’s hard to top the satisfaction of working with someone who is emotionally invested in the success of the business.
That being said, I know small businesses are important for many more reasons outside of the fact that our team at BrandSwan enjoy these projects. I’ve had a kind of intuitive understanding of the positive impact small businesses have on the community and economy, but I finally wanted to put it into words.
How Small Businesses Impact the Economy
“Small businesses are the lifeblood of the U.S. economy: they create two-thirds of net new jobs and are the driving force behind U.S. innovation and competitiveness.”
– A 2018 study from the Small Business Administration Office of Advocacy reinforced the importance of small businesses and the role they play in our economy.
In addition to being more efficient, small businesses are more proactive and more conscientious. Small businesses are more likely to be driven by a desire for independence, to build a legacy, interest in supporting the community, or to “do it better” than their previous employers. While money is a driving factor for any business, small businesses acquire it through quality of work and customer satisfaction rather than pleasing shareholders and increasing stock value.
Small businesses also…
- Produce more per payroll dollar spent
- Have less overhead than large companies
- Produce more new patents per employee (16x more!)
- Create ⅔ of new jobs
- Better reflect the diversity of our population
- Keep tax dollars in the local economy
- Support local economies with jobs, vendors, and products/services
How Small Businesses Impact their Communities
“For every dollar spent at a small business, 68 percent funnels back into the community. Compare that to the 46 percent that funnels back from large businesses.”
– Small Businesses Are the Backbone of the Economy by Better Accounting
“A strong small business presence is what gives a community its character. It creates that sense of ‘place’ that attracts tourists, young people and empty nesters, a talented workforce, and more businesses and investors who drive further growth.”
– Small business is crucial to our local economy by Greater Hall Chamber of Commerce
Small businesses are so much more than just tax dollars and job opportunities. They give back to their local communities and connect with them in a way that a corporation simply cannot. In addition to engaging with their communities through products and services, small businesses are more likely to source supplies locally and have a lower overall carbon footprint.
As far as diversity goes there’s room for improvement, but small businesses are:
- 36% woman-owned
- 14.6% minority-owned
- 9% veteran-owned
Compare that to Fortune 500 companies, which have numbers closer to:
- 7% female CEOs
- 7% minority CEOs
The older the institution, the more difficult it is to enact change. It’s a lot easier for someone to start a business than it is to climb to the top of a massive organization and prove themselves against so many institutional barriers. Which leads me to my final thought…
Small Businesses Create Freedom
All of this is great, but let’s ditch the numbers for a second. Running a small business is really about freedom.
Small businesses enable people to create their own job instead of scouring the job market. It empowers them to be themselves instead of fitting into a mold created by someone else. Small businesses provide opportunities for teams and employees to help shape a company instead of memorizing an employee handbook written 50 years ago. Running a small business is the opportunity to set your own salary, hours, and working conditions. It’s the freedom to determine your own boundaries and how you want to live your life.
I believe small businesses are critical to balancing out the power that bigger companies have so that individuals will always have the option to seek these freedoms if they want them.