Posted on: 25/05/2023 by: in: Startups
In the world of business it seems that the large corporate companies continue to grow at the expense of smaller, owner led businesses. They don’t have the financial limitations or resource issues that smaller businesses face and they seem to get favourable tax breaks and incentives. Despite all of this it is important to remember that small businesses are the lifeblood of the economy and their importance in local communities cannot be overstated. Let’s have a look at why small businesses are so important.
Boosting the economy
According to the Federation of Small Businesses there are an estimated 5.5 million small businesses in the UK, employing 16.4 million people with an estimated turnover of £2.1 trillion. Because the majority of small businesses trade locally, the revenue generated remains in the local community. Estimates reveal that for every £100 spent with a local business, £67 remans in the local community and circulates, sustaining local businesses and enabling economic growth. Most owners of small businesses, when given the choice, prefer to shop locally and support other local businesses. They understand the importance of doing so and where possible will spend locally for their business and their personal needs. Whether that means entertaining clients in a local restaurant or ordering stationery from a local supplier, the loyalty shared between owner led businesses is vital for a vibrant community.
As well as boosting the local economy, small businesses have few recruiting issues because employees don’t have the stress or the cost of commuting a long way to work. Local employers may not be able to pay the salaries that larger corporates can, but the working landscape has changed since the pandemic and people rate their quality of life as being more important than salary. This is where the lack of a commute becomes an advantage for small businesses when it comes to recruitment. Employees also have greater opportunity to work in different sectors of a small business and this is big motivational factor as opposed to working in one role for a corporation.
We’ve all seen the effects of store closures on the retail landscape in towns across the UK. When the larger chains fail or just leave, towns are left with dozens of empty shops which have a detrimental effect on footfall and aesthetically look depressing. Through negotiating favourable terms with landlords and local authorities, locals can be encouraged to start a business in their hometown. By opening up empty units to such businesses, the town regains the buzz it once had. Walking down a busy high street and visiting a thriving market really gives people that feel-good factor and should be preserved for generations to come. Most cities and towns are the same wherever you go. The same brands sold by the same chains and the same food served from the same menus, resulting in a bland, faceless and boring experience. It’s the small, independent businesses that give a community its identity and you often see a friendlier, more personal interaction between customers and staff. Small businesses often participate in community events, with owners and their teams volunteering for good causes and donating to local charities.
Providing a diverse and enjoyable experience
Due to the competitive nature of business, for entrepreneurs to succeed they need to be innovative to stand out from others. They haven’t got the resources of larger, more established competitors and can’t compete merely on price, so they need to differentiate to succeed. This leads to a local community that boasts an exciting and diverse range of businesses where customer service excels. As reputations grow so does the number of visitors to a community and these new customers spend money with local businesses.
One reason why owners of small businesses enjoy loyal, long-term relationships with their customers is the excellent service they are famed for. Another is trust. Research reveals that 65% of customers feel they can trust smaller, independent businesses compared to the larger, familiar chains. They find the workers to be friendlier and 35% consider a small business owner as a friend. Trust is an important consider in all walks of life but especially in relationships. The trust which has been earned is invaluable because it leads to legions of loyal customers who are only too willing to forge long-term relationships with independent businesses.
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