The Importance of Small Businesses

By Maddie J.

Small businesses are defined as independently owned businesses that employ less than 500 employees and have little to no influence over their respective industries. From their roles in both the local and national economy to their parts in preserving their neighborhoods history and culture, they’re crucial to the way we shop, work, and view our local communities as well as our country’s market as a whole.

[To read more about small businesses, click here]

Local shops are vital to keeping a community’s culture and economy alive. Small
businesses reflect on the needs and culture of their respective neighborhoods. Mom and pop restaurants provide food specialties, food marts and convenience stores stock their shelves with local food brands as well as larger company products, and pharmacies’ reflect the needs of their neighborhood consumers. For example, Rainbow Grocery located in San Francisco’s Mission District sells locally sourced and organic products at affordable prices. Most of the money small businesses make goes back into the local economy as well. A collaboration study between Local First and Civic Economics found that 68/100 dollars spent at a local business stays within the
local community, whereas only 43/100 dollars spent at a non-locally owned business stays. This shows that supporting local businesses contributes and benefits our communities more than larger companies do.

According to an article written in 2019 by the Office of Advocacy of the U.S Small
Business Administration, small businesses account for 44% of America’s economic activity. This means that small businesses have contributed and shaped to nearly half of the business and growth we see in the economy today. Local shops are also responsible for creating the majority of new jobs . The Office of Advocacy has stated that ‘Small firms accounted for 64 percent of the net new jobs created between 1993 and 2011’. Community stores have so many benefits to both the local and national economy and are one of the most important parts of America’s economic system.

To find small businesses in your area, click here.