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Salt Lake City Bookkeeping Blog

Why Small Business Is Important to the Economy

Posted by Joe Mazur on Oct 26, 2016 9:00:00 AM

Why_Small_Business_Is_Important_to_the_Economy.jpgThe mom and pop shops in your hometown may not have as much name recognition as a major corporation like Apple or GE, but small businesses create more new jobs than any other kind of enterprise, according to the U.S. Small Business Administration. The largest multinational corporations count on small businesses to funnel products and services their way. And over the past 20 years, small businesses created 64 percent of new jobs, accounting for 44 percent of the total private payroll in the U.S.

The resulting impact on the economy is huge. Small businesses are nimble because they can adapt to changing marketplace conditions and product innovations faster. They’re typically service-focused, because they often live in the communities they serve. They also benefit the local community, because successful small businesses put money back into schools and shared resources through taxes.

Best of all, a small business can grow to become a huge, world-changing corporation, with an economic impact that reaches around the globe.

Small Business Innovate

Small businesses produce more patents than large corporations. That could be because employees are given more freedom to innovate, work independently and make decisions. This may be why small businesses tend to attract workers who are able and willing to think creatively when it comes to solving problems and using technology, according to Chron.com. When a business lacks the resources of a large corporation, employees have to get creative — and inventions from necessity are born.

Small Businesses Keep Local Economies Strong

Small businesses produce more patents than large corporations. That could be because employees are given more freedom to innovate, work independently and make decisions. This may be why small businesses tend to attract workers who are able and willing to think creatively when it comes to solving problems and using technology, according to Chron.com. When a business lacks the resources of a large corporation, employees have to get creative — and inventions from necessity are born.

Small Businesses Keep Local Economies Strong

Big-name companies might grab the lion’s share of shelf space and press, but small business employees comprise a huge share of employment income. Entrepreneur reports that small businesses employ up to 80 percent of the American workforce, accounting for 44 percent of total American payroll. Small businesses strengthen local communities because their workers spend their earnings on goods and services at home.

Business owners invest in their communities through the taxes they pay and by supporting customers by sponsoring baseball teams, building and renting space and using local suppliers.

Helping Small Businesses Succeed

Governments and corporations are tuned in to the role small businesses play in the U.S. economy. That’s why global investment banks such as Goldman Sachs do their part to support small business. Through special programs funded by the Small Business Administration and others, businesses gain access to the capital they need to flourish.

Small business owners can also participate in programs that offer skills training and encourage partnership with mentors. There are also courses offered by community colleges nationwide that give owners a chance to refine their skills and instincts through business classes. These courses aren’t just for rookie entrepreneurs or start-up partners — they’re also suitable for established professionals.

Some small businesses are built on the foundation of helping other small businesses succeed. At SLC Bookkeeping, we help entrepreneurs focus on their customers by providing outsourced back office accounting functions at a fraction of the cost of a full-time CFO.

For more information about SLC Bookkeeping, contact us today!

Topics: Small Business, Business Tips