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  • Writer's pictureRayanne Armand

Why Do Small Businesses Matter So Much?

It feels like you're forever hearing the words "support small businesses!" on social media, but why do small businesses matter so much?

Do we just like to support the little guy, or are SMEs actually vital to the economy?

Let's take a closer look.

Small Business is Big

Small- and medium-sized businesses account for over 99% of all businesses in both the UK. In fact, around 12.9 million people are employed by SMEs - that's around half of all private sector employment.

There are over 5.5 million small businesses in the UK, and in 2021 total small business turnover stood at £1.6 trillion - impressive!

Small Businesses Give Back

Small businesses often play a crucial role in supporting their local communities. They provide employment, training and development opportunities and help to keep money circulating within the local economy.

They also tend to be more responsive to the needs of their local community than larger businesses, and are often at the forefront of supporting local charities and causes.

Small Businesses Drive Innovation

Innovation is vital to the success of any business, but it's particularly important for small businesses. They need to be able to move quickly and adapt to change in order to survive and thrive.

Innovation can be anything from developing new products and services, to improving existing ones, or finding new ways of doing things. It's this agility and adaptability that often makes small businesses more innovative than their larger counterparts. It's easier to pivot when there's a shorter chain of command; think about turning a speedboat around vs. a giant oil cruiser.

They Offer Autonomy

Small businesses offer their employees a level of autonomy and independence that can be hard to find in larger organisations. This can lead to greater job satisfaction and motivation, as well as a sense of ownership and pride in the business.

Community Identity

Small businesses often help to create a sense of community identity. They give people a sense of pride in their local area and can make it feel like somewhere worth living and working. A vibrant local economy is good for everyone!

Giving Back

SmallBizTrends reported that 52% of small business owners donate to charity, while 90% support local causes. This is often done in the form of time, products or services, rather than just financial donations.

Further, small businesses tend to employ people from the local area, so their staff are likely to have ties to the community and an understanding of the causes that matter to its residents.

Encouraging Entrepreneurship

Small businesses are the backbone of any economy, but they also play an important role in encouraging entrepreneurship. Starting a business can be a daunting prospect, but seeing successful small businesses in the community can give people the confidence to take the plunge.

What's more, small business owners are often happy to share their experiences and offer advice to budding entrepreneurs. After all, we were all start-ups once!

Healthy Competition

Last but not least, small businesses keep the big guys honest! They provide healthy competition and help to keep prices down. A vibrant small business sector is good for both consumers and the economy.

In Conclusion...

Small businesses matter because they really are the lifeblood of the economy.

They create jobs, they drive innovation, they give back to their communities and they encourage entrepreneurship.

We should all support small businesses, whether that's through shopping locally, using their services or investing in them. Let's keep the small guys afloat - they deserve it!

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