Small business is an important focus of economic recovery because they are adaptable and stable forms of tax revenue and they create jobs.
Since the recession, the U.S. economy has not bounced back as quickly as it has in the past. One of the main reasons for this delayed recovery is because of the decrease in small businesses. Although small businesses do not generate as much money as their larger counter parts, they are an invaluable piece to the country’s economy. In the United States alone, small businesses make up between 60-80% of all jobs and employ almost half of the private sector work force. Therefore, when considering ways to further stimulate our economy, focusing on the establishment and growth of small businesses is an ideal place to start.
On a local scale, small businesses strengthen the economy by bringing growth and innovation to the community. Small businesses attract talent from individuals who are inventing new products or creating new solutions. In addition, small businesses usually remain stable through changing economic times as they are more adaptable to change and customers are more likely to stay loyal. Even if the economy is struggling, majority of consumers will not stop going to their favorite local coffee shop in the morning, regardless if the latte price increases twenty-five cents. As a result, small businesses are a stable form of tax revenue for communities and where there is more tax dollars there is a bigger budget. This budget is reinvested in the community through schools, public transportation, and the police force.
In order to maintain the valuable effects small businesses provide to the economy, the right climate of entrepreneurship and support must be created and fostered. Fortunately, many programs and support organizations exist that valuable the role of the small businesses, even if they are not small businesses themselves. For example, Goldman Sachs created a the 10,000 Small Business Initiative which focuses on providing small businesses with “greater access to business education, financial capital, and business support services”. The company’s goal is to reach 10,000 small businesses across the country through this integrated approach to create jobs and economic opportunity.
Although the labor department recently announced that unemployment rates fell, the data does not always portray the whole story as there are millions of people still searching for jobs. In order to see our economy continue to flourish, new jobs must continue to develop, which is exactly where small businesses come into play. The value of small businesses and consequently more employment opportunities cannot be understated, as it is a major source of economic stability and economic growth that our country still desperately needs.