Small business are the building blocks that make any nation great, take a look at the thriving economies around the world.
You’d notice they all have thriving small businesses but sometimes, a small business due to mismanagement may become illiquid to pay her debt and therefore file for bankruptcy. Check out small business bankruptcy lawyer filing to get counsel on whether bankruptcy is right for you.
One tends to wonder, why are small businesses important to any economy that aims to develop? You don’t have to thirst for the answers anymore. I will be writing on the importance of small businesses to the economy of any country in this post.
What is a small business?
The term “small business” varies from one country to another, but in a more generic term, it means a business which could be a privately owned corporation, partnership, or sole proprietorship that has fewer employees and less annual revenue than a bigger sized business.
Small businesses range from fifteen employees under the Australian Fair Work Act 2009, fifty employees according to the definition used by the European Union, and fewer than five hundred employees to qualify for many U.S. Small Business Administration programs. Asides to employment size, small businesses can also be classified based on how much their turnover is, sales, assets, or by annual gross or net revenue or net profits.
Now we can head right to what small business signifies in terms of importance to the economy of any nation.
Importance of small businesses to the economies of the world.
- Employment creation: this is perhaps the most visible importance. According to a report by SBA, the United States Small Business Administration, small businesses represent 99.9 percent of all U.S. businesses. Now imagine if there were to be no small businesses? Would the big guys be able to absorb 58.9 million workers that are employed by small businesses as of 2018?
So without small businesses a number of the employed population would probably be languishing in poverty and well the Government would be immersed in payment of unemployment benefits!
- Revenue generation: At times, I liken the Government to a Business that needs cash flow to survive, forget the fact that it has the right and is largely at liberty to print money. If the government does not earn money through value creation, it will suffer and be incapacitated to take on infrastructural and social projects that will make life easier for her populace.
- Small businesses are innovative and service centric: The market is never stable, it is always wilding. Big corporations in most cases are overwhelmed by bureaucracy, so it takes a while for the business to adjust to the customer needs in the market, but this is not the case for small businesses, they respond quickly to changing economic conditions this is because they are often very customer-oriented and understand the needs of the community.
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