Why are small businesses important to the economy, and what overall impact to you think they make to the economy?

Quick answer:

Small businesses are important to the economy because they provide opportunities for entrepreneurs and aspiring business owners. Small business invariably support other small businesses and keep money in local markets. In addition, small businesses are breeding grounds for great ideas.

Expert Answers

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If large corporations and conglomerates are essential to the survival of a nation, then small businesses are essential to the communities in which they operate. Without the small business landscape, there would be no opportunities for entrepreneurs and those wishing to start businesses. Remember, all big companies start small.

The different between large and small businesses can be clearly seen if you look at the example of restaurants. Consider your neighborhood McDonalds, where the food is great but everything is generic and mass-produced across the country. Then think about a small, independently-owned restaurant in your neighborhood which caters specifically for people in your area, taking into account their cultural needs and local flavors.

Small businesses are responsible for many job opportunities, and because they are small and do not have access to global networks, they are likely to be sourcing their raw materials from other local suppliers rather than from other countries. This keeps money in local economies rather than putting it into the hands of multinational conglomerates.

Start-ups and small companies are often where innovations and new ideas are thought of and put into place. This is generally because there is so much less red tape and bureaucracy to deal with in small companies, and it's therefore much easier to run with a new idea.

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