5 Ways Small Businesses Impact their Communities

By: Lauren Marsicano

Insta: @networkingmaverick

5 Ways Small Businesses Impact their Communities

Small businesses are the backbone of communities. We enjoy the positive roles they play in our lives daily. But we rarely stop to consider what their impact might be. If you’re a consumer, it’s valuable to know the impact that small businesses have on your community and the importance of shopping locally. If you are a small business owner yourself, understanding the impact of your business can help you leverage your strengths in order to succeed and generate even greater positive impact!

So, how exactly do small businesses impact their communities? Let’s explore.

Small Businesses... 

1. Stimulate the Local Economy

Small businesses are phenomenal for local economies, because they often invest most of what they receive. For example, according to BBB, if you spend $100 at a local business, approximately $68 stays within the local economy. Many times, small businesses will make an effort to patronize other local businesses in order to aid the local economy. So when you shop at a small business, you’re also supporting the network of the local economy.

2. Create Jobs

Creating jobs has a major positive effect on the community. According to the U.S. Small Business Administration’s August 2017 Small Business Quarterly Bulletin, small businesses have created two out of every three net new jobs since 2014. That’s a huge slice of the new job pie! Supporting small businesses means supporting the job market, which positively affects both local communities as well as the world. 

3. Increase Local Tax Base

An often-overlooked benefit of small businesses is their impact on local tax bases. According to the National Association of State Retirement Administrators, 42% of local and state government tax revenue comes from sales tax, licenses, and other levies on businesses. State and local governments use this tax revenue to support infrastructure, housing and development, education, law enforcement, first responders, and more. 

To sum it up: Small businesses pay local taxes, and those taxes greatly benefit the local community. 

4. Are Environmentally Friendly

Small businesses are great for the environment, and whether or not that’s an active goal of those businesses or an accidental positive effect, it’s still a great thing. The Environmental Protection Agency reported that groupings of small businesses in a walkable area or near residential neighborhoods can reduce car usage and encourage more environmentally friendly modes of transportation, like walking or biking. This means that areas with small businesses have reduced emissions from vehicles, better air quality, and less traffic congestion, which makes these areas safer and a better experience for those within the community. 

Supporting small businesses also lessens the negative environmental impact of transportation. For example, if you shop at a large grocery store, when you buy an apple, you’re also buying the environmental cost of that apple–– the greenhouse gas emissions, fuel consumption, and pollution necessary to transport that apple from where it grew to the grocery store. So, when you buy from a local farmer or farmer’s market instead, you’re directly supporting small businesses and the overall environment.

Additionally, the Huffington Post reports that 66.3% of small businesses use recycled materials. So, what does all this really mean? Basically, if you support small businesses, you’re also supporting the environment.

5. Bring Character to the Community

Let’s do a quick thought exercise together. Think about your neighborhood. It could be the one where you grew up. Or the one you live in now. What came to mind first? Maybe the local ice cream parlor? Or a shop where you bought your favorite necklace? How about a local firm that helped you file your taxes? When we think of our neighborhood, we think about things that make it unique, the places that make it feel like our community. That’s what makes local businesses so special! They make a community feel like home.

Recap

To recap, the top 5 ways small businesses impact the community are that they:

1. Stimulate the local economy

2. Create jobs

3. Increase local tax base

4. Are environmentally friendly

5. Bring character to the community

So, if you’re considering shopping locally, do so with the knowledge that every cent you spend has a much larger positive impact. And if you’re a small business owner, recognize that your impact is a positive one, one that you can leverage to create more positive change. 

Now if you don’t mind, I’m going to support some Queendoms and Kingdoms by purchasing some goods and services from my favorite small businesses. 

Until next time, happy connecting!

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