What produces almost half of America’s non-farm goods and creates two-thirds of all net new jobs?
Small businesses do.
It’s National Small Business Week! And while every week is small business week here at Lendistry (and should be all over the world), we’re celebrating anyway by sharing why it’s so important to support local businesses.
(Quick answer: because they support YOU.)
The less-quick answer begins with a question: what counts as a small business? A small business is privately-owned and usually does most of its business in the area in which it is physically located. The Small Business Administration quantifies the term “small” based on annual receipts and number of employees, by industry. Most small businesses can have a maximum of 500 employees and a few industries can have up to 1500 employees, but 89% of all small businesses have fewer than 20 employees.
99.9% of all business firms in the USA are small businesses, and 99.7% of them have paid employees. There are more than 26 million small businesses in the U.S. Of those 26M, 8 million are owned by minorities, 2.5 million are owned by veterans, and 9.9 million are owned by women. Of those women, 68% are minorities.
Why are these businesses so important? They may be small, but they pack a mighty punch in their local communities by putting more people to work and injecting more revenue back into their local economies. Small businesses provide 62% of all net new jobs in the country. In 2016, that added up to 1.1 million new jobs.
Small businesses also donate 250% more to non-profits and community causes than large businesses do.
Even a very successful small business has less revenue than a large chain and benefits from fewer tax breaks and loopholes. Because of this, a thriving small business pays more local taxes than a large business does. That means more of the money you spend at a small business ends up helping the school, police and fire department in your neighborhood.
Locally-owned restaurants return twice as much money to their communities as large chain restaurants do.
What can you do to keep these numbers growing? Shop small, and shop local.
Just a 10% shift in family spending from national to local businesses would bring an additional $235 million to local communities.
Happy National Small Business Week, and make sure you shop at small businesses 24/7/365!