When you spend, suppose $100 on local business, $68 stays within the community, and the remaining $32 leaves the local community. However, if you spend $100 on non-local business, $43 stays in the community, while the rest $57 goes to the local community. Now, you are smart enough to understand how and why small businesses are helpful to the community.
Small businesses are sellers of locally made products who buy raw materials and workforce from locally available vendors. Entrepreneurs of small businesses are behind the counters, so whenever you have a problem with their product or services, they are just a distance away. Compared to large corporations, local businesses support their local communities 250% more times in social and charitable events/causes. If this too does not convince you, read the benefits explained below that will make you understand how beneficial small businesses are for the survival of local communities.
Reasons Why Small Businesses Are Helpful To The Local Community
- Render A Unique Identity To The Community:
Local businesses give a unique identity to the community from where it operates. From local shops to professional service providers, every small business owner reflects the town’s personality through their work, lending a distinct identity to that small town, which sooner or later turns into a global identity of that town.
Through these small businesses, visitors visiting the community get a sense of its core values & principles. For instance, a locally owned restaurant mirrors the unique cuisines/dishes of the community.
- Business Owners Involving In High Spirits In Their Community Matters:
Small businesses are well-off to support charitable donations or volunteer for work to show participation and involvement in local events and festivals. You can see local enterprises sponsoring local sports events to help local talents shine and prosper.
They can volunteer to clean their community and remove all the trash littering the roads. Research shows that 52% of entrepreneurs who own a small business donate to charity, and out of this, 90% are those entrepreneurs who donate towards local causes.
- Enhance Community’s Economic Health:
It happens many times that a small business comes to help other local businesses to build a thriving local economy. They aim to help fellow business friends and neighbors keep the community business engaged and create strong community bonds.
Research reported that 70% of small business employees have a happiness level of 5 or above on a scale of 1 to 10. 56% of local business employees showed high commitment scores compared to 38.7% of employees in MNCs. Further, 91% of small business employees shared that employee happiness was essential to their company leader. An additional 86% stated that their opinions and ideas were welcomed and respected by the company’s leader.
The spending those small businesses incur to support other local companies gives rise to a “multiplier effect,” which is essential for building a healthy and vibrant community.
- Promote Pro-Environment Behavior:
Small businesses actively participate in the overall community revitalization process through which older community buildings and structures are remodeled to serve different businesses.
By starting a business in the community’s historic buildings and within its boundaries, local businesses reduce environmental damage by saving green lands and ecologically sensitive areas from being murdered for urban development.
The Environmental Protection Agency (EPA) stated that a group of small businesses operating in a walkable distance or near residential areas can help reduce car usage and encourage people to walk. A survey reported that 66.3% of local business entrepreneurs used recycled materials to pass on pro-environment behavior within the community.
- Contribute More To The Local Tax Base:
Small businesses pay taxes to the local government or authority that bolsters their provincial treasury, used in public welfare services, such as improving public toilets, roads, schools, and the environment.
When local people spend money purchasing products from within the community, they pay taxes to their community treasury used for their welfare. Small businesses first try to procure all their requirements from their community sellers so that the community’s money floats within the community.
With the help of local vendors, local communities have grown strong and created a live-work-play environment with city-like infrastructure that has helped them build a good treasury for future use.
- Generating Local Employment Opportunities:
Local businesses tend to provide job opportunities to local people hailing from their community and are legally allowed to work. They intend to uplift the local people by offering them a suitable means to live an everyday life and promote their community’s welfare in society.
They do not want their people to go out to the city searching for work and get underpaid for their services. With this, small businesses will insert another head contributing to the local money flow.
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- Encourage Innovation & Healthy Competition:
Innovation is the key behind a successful small business. Local businesses tend to solve everyday problems through a new approach, either in service to help others or a new product. With innovation, they bring in healthy competition in the marketplace that encourages people to improve their services and product line.
- Diversifying Product Range That is Locally Made:
A small business usually keeps all the things that it thinks will be needed by the people residing in their community. For instance, I own a general store in your community where cosmetic and beauty products are also available, and you own a beauty shop in that community where you urgently require a face wash for your customer. You can reach out to my store and purchase the face wash, which has been locally manufactured. You did not have to hunt for your urgent need this way, and I promoted my locally made product.
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The Final Lines
The impact that small businesses create on communities is much more than we realize. Local businesses together have positively impacted the growth of the local economy, bringing forward merchant associations, involvement in local events, and offering jobs to localites. They all stand united as one to serve as one.