It seems these days that so much of the economic news centers around major mergers, the potential impact of international trade wars on corporate America and the ever-expanding reach of big data and tech companies. All of that is, of course true.
But underneath the headlines, the vitality of small businesses across the country is a bit of an underdog story worth telling. In fact, small businesses have accounted for nearly 65 percent of new job growth and comprise nearly 45 percent of the total U.S. private payroll, according to the Small Business Administration. There are key reasons why small, and not big businesses, are the foundation of the economy.
Competition. In a landscape dotted by corporate franchises, the small business owner continues to provide crucial alternatives for consumers. That is true from the artist selling their wares directly to the grower who can avoid shipping costs and sell below supermarket prices. When that happens, the money also stays in the local economy.
Jobs. Local hiring in any community can depend on the area’s individual markets. But the hundreds of local businesses, taken collectively, employ more people than the behemoth Walmart’s and big boxes.
Different priorities. Rather than satisfying a corporate culture and centralized system, the small business can tailor its budget and operating methods to what works locally. That diversity in a market actually strengthens the economy.
Failure. Yes, small businesses fail — often. Even so, that negative experience can have a positive economic impact as many small business owners learn from their mistakes and come back stronger, fostering a more robust local network of business.