How Important Small Business is for Local Economics

Commerce in Missoula was started way back in the 1980s and still thrives up to this day – thanks to the influx of small businesses. From agriculture to travel and tourism, shopping and retail, recreation, food, and advertising – the spirit of entrepreneurism has really made a huge impact to the local economy, providing jobs and improving the quality of life for locals.

Small Business: Big Impact

You see them along the streets – small shops that sell various products – from aromatic coffee and desserts to personalized items and unique crafts that you can only find in the local area. You probably know the owners of some of these shops (a few might even be your neighbors). Small businesses might look like tiny dots in the world of commerce and industry but they have the biggest impact, particularly on local economics.

Job Opportunities

Capital investments to operate a small business vary, ranging from a few hundred dollars to several thousand. Thankfully, there is a myriad of financing options, such as a cash advance online for starting the business. And with every store that opens, jobs are afforded to some people. Small businesses are engines of job creation in the United States, so they say. According to Downtown Missoula Partnership, small businesses have given over 8 million job opportunities since 1990. Small businesses make up the biggest percentage of employers in the United States and are responsible for the majority of new jobs created every year. These companies include startups that have provided huge job opportunities for people even from different parts of the world.

Local Economic Growth

There are a lot of reasons why consumers are encouraged to patronize local products. With every $100 spent in a local business, about $68 is retained in the local economy. However, if you spend the same amount of money in a large business, only $43 stays in the local economy. Another way these small businesses stimulate economic growth is by providing employment particularly to individuals who may not make it to large corporations. Also, many large companies depend on small businesses for the completion of various functions, a process known as outsourcing.

Innovation Drivers

There’s no doubt – small businesses are drivers of innovation. Some of the most creative business models come from startups and budding entrepreneurs. Within small companies, employees are given the opportunity to work independently, make decisions, and get creative. Innovation may result in new products and services, more efficient business processes, and so on. A lot of small companies became popular by offering something different and of great value to the people.

Community Involvement

The local community of Missoula largely benefits from local businesses. The Missoula Chamber of Commerce, for instance, hosts a variety of programs and events not only to foster a healthy environment for local businesses but also to help the community. Dedicated volunteers and sponsors come from various sectors, providing training, workshops, and community service.

Tax Money

Missoula has the ninth highest business startup activity, based on a 2017 report. The increase in the number of small businesses means more local tax money, which is used in improving education, healthcare, and other public services. It’s used to pay firefighters and police officers who risk their lives to protect people. Tax money also facilitates infrastructure and improvements, such as roads, parks, libraries, and other public facilities. Additionally, the tax money these establishments pay goes towards local government funding for programs to support schools and the poor.

Adaptability to Economic Changes

Compared to large corporations, small businesses respond more quickly to changes in the economy. That is because they are more customer-oriented and understand the community needs even better than the big companies. And since their revenues are smaller than large companies, small businesses have less to lose in times of economic crisis.

Promotion of the Community

Small businesses are what make every tourist’s travel experience worthwhile and memorable. They make communities more interesting and unique, attracting new neighbors, visitors and guests. Local restaurants, for example, feature regional specialties while hotels offer a unique, local experience. All these help promote local communities, which in turn, spurs economic growth by boosting tourism.

Making an Impact

Small businesses don’t stay small forever. Google, Amazon, Apple, and The Walt Disney Company are just a few of the small companies that turned big over time. They didn’t just contribute to the growth of local economies, they also made an impact on the national and international economies, inspiring more businesses to innovate, work hard, and succeed. These companies often put up headquarters in small communities, providing employment and boosting the local economy.

There are a lot of reasons why we should promote and patronize local businesses. Needless to say, they are an integral part of the local economy that fosters financial growth and stability, and prosperity. By simply spending money in a local store, you are helping pay a worker in your neighborhood, create more jobs, increase local government funding, help less fortunate people, and contribute to the progress of your community.