24/02/2024
Small businesses

Why Small Businesses are the Backbone of the Economy

Don’t underestimate small businesses. I repeat, don’t underestimate small businesses. A lot of business owners and entrepreneurs have a dream, and that dream tends to centre around making it big. Becoming the ‘go to’ business in the industry or becoming a household name, and a brand everyone knows. Though there is undeniably attractive, it takes away from the fact that many small businesses are doing a lot for the economy.

Today, I’m asking the question, would the economy suffer without small businesses? I think I know the answer and if you keep reading, so will you.

Small Businesses Boost the Economy and Here’s How

A lot of people make the mistake of assuming that the economy is held up by large, successful and international businesses. Those that are established, global and bring in huge profits every year. But, small businesses are just as important. As someone who has worked with a lot of small businesses over the years, mine and others, I know how impactful a small business can be. 

Small Businesses Create Jobs and Employment Opportunities – One of the best things about small businesses is the number of jobs they create. Regardless of the business type of industry, small businesses are hubs of employment. They provide a lot of opportunities to job seekers, especially in local communities. As a small business grows, it will continue to boost job creation and help to reduce unemployment rates.

Small Businesses Help Local Economies – A lot of small businesses hold a strong position in the local area that they serve. When consumers support local business, their money circulates within that same community. This creates a cycle of economic sustainability. Small businesses regularly source goods and services from local suppliers, which also strengthens the local economy. 

Small Businesses Encourage Innovation and Entrepreneurship – There is a lot of creativity and innovation that goes into starting a small business. There is a lot of entrepreneurial spirit to be impressed by. With so many competitors, many of which are sure to already have a place in the market, small businesses need to be able to quickly adapt to changing market demands and embrace new technologies. They become centred on new ideas and they push the boundaries of traditional industries. In order to succeed, small businesses embrace innovation and entrepreneurship in a way that larger businesses don’t. 

Small Businesses Diversify Economic Ecosystems – Small businesses are often diverse and unique, and this creates a diverse economic ecosystem. Each small business brings a unique set of skills, expertise and offerings to the industry. This adds something new to industries and services. This diversity ensures that economic stability is not dependent on the success of one or two established businesses. It also reduces the risk of market downturns. If one major business runs into trouble, small businesses are always there to pick up the pieces. 

Everyone Has to Start Somewhere, Even Me

All businesses start off small. Even Inc & Co had to grow from an initial idea into the successful company that you see today. This growth doesn’t happen overnight. It takes hard work, dedication and passion. It’s a rite of passage for all businesses, and it can actually be hugely beneficial. Transforming from a small business into a large and successful company provides the perfect opportunity to hone your craft. You can make changes and tweaks along the way. You can develop your services, products and offerings. It’s even the ideal time to build a strong, reliable and talented team. 

You might be satisfied with having a small business, and you have no desire to grow it into anything more. Some people don’t understand why, but I do. Though I am a huge proponent of business growth and reaching new heights, I also understand the appeal of keeping things small. Small businesses provide a personal touch to customers and they are a lot easier to manage. 

To Sum Things Up

If there’s one thing that I have learned about small businesses, it’s that they are the backbone of the economy. Instead of looking down on small businesses – and viewing your own small business as ‘less than’ larger competitors – focus on the important place that a small business has in the economy. 

Written by
Scott Dylan
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Scott Dylan

Scott Dylan

I’m Scott Dylan, Inc & Co Co-Founder. I oversee the company's strategic direction and work to acquire and invest in distressed and viable companies, helping businesses improve their business processes and setting strategic directions.

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