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What are Small Businesses?
According to the Small Business Administration, a small business is defined as any independently owned and operated company with limited size and revenue. Typically, small businesses can include privately owned corporations, sole proprietorships, or partnerships. A key distinguisher, however, is that small businesses have less revenue than larger businesses in its industry. That said, it’s worth noting that the size and revenue standards of being a small business vary from industry to industry. This means that depending on the industry, a small business could have a maximum of 250 employees or 1,500 employees. For more information on small business size standards, click here.
What’s the BIG Deal?
You might already know of a few small businesses in your community. You might already buy some of their products or services. But did you know that small businesses are the heart of our communities — and that they are struggling?
The SBA estimates that there are approximately 28.8 million small businesses in the U.S, which makes up 99.7% of all businesses in the United States. That makes small businesses a BIG deal!
Unfortunately, that’s not all.
According to data from the U.S. Bureau of Labor Statistics, 20 percent of small businesses fail within their first year of operation. By the end of their fifth year, roughly 50 percent of small businesses fail, with 65% failure rate on all small businesses by year 10.
Why is this? Simply put, these independent businesses often have a hard time competing with its larger market-share holders in their respective industry.
Independent businesses give cities their shape, texture, color, and taste…often literally.
Hasan Minhaj
Why Support Small Businesses?
According to the U.S. Small Business Association and the U.S. Department of Labor, supporting small independent businesses come with several positive impacts:
It Drives Innovation Forward
At the heart of small businesses are their entrepreneurial founders —dream-filled, ambitious, resilient pioneers. These people are driven by their passion to build, even in the midst of uncertainty. These people are champions of innovation, risk-takers, community members who strive to lead their family and community forward. When we support small businesses, we invest in the cultivation of innovation for the years to come.
It Supports Community Members
Generally, local businesses are owned and operated by our community neighbors! Because they are part of the community, small businesses provide a hometown feel and add “flavor” (often literally!) to our communities. Often, these small business owners genuinely care about the well-being of our communities and are personally invested our communities’ future.
You want to shop and live near places that actually mean things to people; places that have a real effect on communities. You can feel when someone really cares about the neighborhood they’re running a business in.
Sandeep Salter
It Stimulates the Local Economy
According to the multiplier effect, the collective revenue from our businesses have the power to help local development by ensuring it stays in the community. Here’s a good example of how the multiplier effect influences community development:
A restaurant buying ingredients from local producers uses a local insurance broker and hires a local design firm, building symbiotic relationships that help the whole business community prosper.
Dayna Winter
For every $100 spent at local businesses, approximately $68 stays in the community. According to the American Independent Business Alliance, “independent retailers return more than three times as much money per dollar of sales to the community in which they operate than chain competitors. Independent restaurants return more than two times as much money per dollar of sales than national restaurant chains.” So when you and I choose to shop small, our dollars become our vote to keep these local businesses going not just directly, but for the entire community as well.
How Can I Support Small Businesses?
Small businesses are important to the economic and social fabric of our society, and we all play a part in their survival.
Dayna Winter
In my personal opinion, everyone has the ability to support small businesses. True, shopping local may not be the most affordable or most convenient option compared to shopping at a large national chain. However, there are MANY ways we can support our local economies each in our unique capacities. Here are some ways you can support small and make a difference:
- Buy a present from a local gift shop or the little bookstore downtown
- Try out that new restaurant that just opened up (even if it’s just for appetizers or dessert!)
- Purchase a house plant from a local nursery
- Visit your local farmer’s market. Chances are you’ll find the vibrant selection of produce to be exceedingly fresh!
- Purchase gift cards to local establishments to use later or as a gift!
- Engage on social media platforms and leave positive reviews for small businesses.
- Be patient on existing orders. Small businesses don’t always have the resources to run as efficiently as national chains, so a little patience goes a long way!
And lastly, even if you are not at a place to support local businesses through a product or service purchase, remember that you can always support them through your kind words (whether in person or online!)
So next time you’re in need of products or services, think local. Support small. Let’s choose to build up one another in our communities and share the little encouragement we all need from time to time 🙂
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