The pandemic has led most small businesses around the world to enter survival mode. Even those that have been enjoying growth before 2020 found themselves suddenly losing a steady stream of income because of COVID-19.
The disappearance of small businesses will be devastating to the national economy. Moreover, the community in which they exist will also suffer from the loss.
That is why, as the United States reopens steadily as it inches toward herd immunity, consumers should prioritize buying local goods over continuously supporting giants such as Amazon. Because, while small businesses close their doors to customers for good, Amazon had to increase capacity. The pandemic only made founder and CEO Jeff Bezos richer, helping him keep his status as the wealthiest man on Earth.
By helping local small businesses, it will help the entire community rise up after the challenges of COVID-19.
Small Businesses Create More Jobs
Millions of Americans last year filed for unemployment after losing their stream of income because of the restrictions and the resulting recession caused by COVID-19. Although the economy has started recovering and the unemployment rate is on a decline once again, the situation is far from returning to normal.
But, supporting entrepreneurs in your neighborhood empowers them to scale their small businesses and create jobs for those who have been let go because their place of employment closed down or was let go when their company downsized.
For example, a craft brewery that has seen a significant rise in sales can acquire the necessary equipment to push more products to the market, such as a liquid filling and depositor machine. They would also need to hire new staff members to operate the equipment. A growing business will also need people to manage social media marketing, design a new website, and provide customer service.
Within the private sector, small businesses create 64 percent of all new jobs — significantly more than positions that open up in multinational corporations worth billions of dollars.
Small Businesses Innovate
Innovations do not happen in corporations that have resources and manpower. These places have more to lose when a new product or service introduced to the market fails. Instead, ingenuity comes from startups which, sometimes, get limited funding and support,
One report released by Small Business Administration (SBA) revealed that small businesses submit 16 times more patents per employee compared to large companies.
Innovation does not just benefit the business. It transforms the community and generates more potential for profit. Over a hundred years after the Wright Brothers invented the first flying machine that transformed transportation forever, their hometown, the city of Dayton, is still benefiting from it in many ways.
Small Businesses Return their Earnings to the Community
When a big box chain earns money, all of it goes to shareholders. However, when a small business makes money, they tend to invest it into the local community, enabling other entrepreneurs to start or scale their own ventures.
One report found that independent retailers return more than thrice as much money per dollar of sales to the community compared to chain competitors. That is because local businesses also tend to support other local businesses such as service providers, farms and suppliers, and banks. They are not harmful, but actually helpful, to other local businesses. Meanwhile, a national chain restaurant or store will spend their earnings in another region where they can procure goods at a cheaper price, and they raze small competitors to the ground.
The continued existence and the success of small businesses, therefore, boost the local economy because the money circulates within the neighborhood, not leave it.
Small Businesses Alleviate Members of the Community from Poverty
All these work together in order to alleviate members of the community out of poverty. The National Community Reinvestment Coalition (NCRC) says that the existence of small businesses is key to lifting people up from financial hardships and promote economic self-sufficiency because they create opportunities for people within the neighborhood.
It also allows minorities and immigrants to build their own ventures. These groups usually do not have the resources and the connections to climb the corporate ladder. So, they create opportunities for themselves and for others. When small businesses reinvest their earnings to the community, they also empower minorities and immigrants to succeed.
Small businesses play important roles within the community in which they operate. If they disappear, everyone will be negatively affected. Their continuous existence, therefore, should be everybody’s concern. However, consumers do not need to do much to help local entrepreneurs. They only need to choose to buy local to support local businesses and, therefore, the community.