We've previously discussed on this blog the personal reasons why aspiring entrepreneurs should start their own businesses. Today, we'll delve into what those small businesses — which the Small Business Administration (SBA) defines as companies with 500 employees or less — can do for their local economies.
According to Houston Chronicle contributor J. Mariah Brown, small businesses contribute to their towns' and cities' local economies in the following ways:
- They give local residents new job opportunities, and allow talented and innovative people who might not be suited for a position at a large company to think outside the box and grow. "Larger businesses also often benefit from small businesses within the same local community, as many large corporations depend on small businesses for the completion of various business functions through outsourcing," writes Brown.
- When locals shop at small businesses, they're funneling money back into their communities by providing those businesses with revenue, which they'll pay taxes on. That tax money will be used for essential public services (e.g. fire departments, public schools, police). Since small business owners develop long-term relationships with local residents, customers will often display loyalty to those businesses, even in tough economic times.
- If a small business grows into a large corporation and its headquarters remains in the town or city in which it was founded, it can contribute even more job opportunities to the community. Brown cites Nike and Ben and Jerry's as examples of small businesses that "grew to become major players in the national and international marketplace."
Now is as good a time as any to start your small business. If you're in the planning stages, contact us to discuss the benefits of incorporating.