The Big Impact of Small Businesses

There are personal and economic benefits of small businesses. And people go into business because they want to make a positive impact in their lives. They want to make their lives better and they think business is the only way to do it. After all, the possibilities are endless and they are all in your hands. There are no bosses to tell you what to do, and there are no limits to how much you can earn. At least, that is how we envision a business is since you, as a business owner, create the rules — based on logic, that is.

But while a business could possibly have a positive impact in your life and that of your family, it also has some impact in the outside world. The benefit of opening a business may not be limited to your home or your office. It could spread through the society. Here are some positive impacts of a business.

Employment opportunities

As of December 2016, unemployment rate in America is at 4.7 percent. When you open a business, you could at least help some people get a job. Getting a person or two already means helping a family or two to have better lives. Employing a person already means allowing him or her to provide for a family — putting food on the table, sending children to school and having your employee get a retirement fund to seal his or her future.

That impact also goes back to the society. Because your employee already has the buying capacity, he can buy fresh produce from the local market. As a result, the employee is also helping market vendors earn money. And the cycle goes on and on. When the employee sends his or her child to school, you are helping school supply stores earn money as well. And when the employee’s family eats at a restaurant, the waiter will earn a tip that could help him survive as well.

According to Forbes, small businesses have big impact. And according to Entrepreneur, there are about 26 million small businesses in the U.S. that employs around 70 percent Americans.

Economic impact of small businesses

It is not just society that benefits from businesses, the government benefits as well. As we all know, tax is the lifeblood of the government. Businesses, themselves, pay taxes. Taxes pay for our roads, social services and welfare for the less fortunate. Every employee of a business also pays taxes. And since businesses give employees buying power, the government also earns from the taxes imposed on products and services.

Education is one very important service offered by the US government. Parents don’t need to be rich in order to get an education. Some schools, though, have better facilities than others. That is because some states impose bigger taxes than others. So know that your business is not just giving you livelihood, it also helps educate your children and the children of other people.

If you don’t have children, then perhaps you can’t feel the positive impact your business has on the society. Then perhaps you have parents that could benefit from the government’s Medicare and Medicaid programs. Well, maybe not that latter. The latter is usually a health benefit given to people with very low income. The Medicaid, on the other hand, is a health coverage for citizens that are over 65 years old.

When disasters strike, know that the government has funds to help out people affected by the tragedy. While the help will not last a very long time, at least the government can shoulder the food expenses needed by survivors of fire, typhoon, tornado and other natural disasters during the next 24 hours. An emergency fund is possible because of the taxes earned from businesses, employees and other value-added taxes.

Philanthropy

Some businesses earn a tax break for philanthropic or charitable efforts. Other businesses do it for the sake of a tax break. But others do it because they really want to help the less-fortunate ones. But whatever the motivation of some businesses to do good, the advantage there is that people within the poverty line will benefit.

Competition breeds better products / services

Competition is a business reality. But while business owners are stressed about how to one-up the competition, this attitude is only helping the public. This means that every business will make sure they have the better product / service in order to keep its clientele and even get more customers. Competition will ensure that products / services are on trend while businesses continue to innovate just to make things better. This means that the public will only get the best, from whichever business that is trying to compete.

Not only are products and services better, there is a tendency that these will be cheaper too. Business owners will try to innovate to offer cheaper products and services without sacrificing quality. Innovation also encourages efficiency. All employees will now have to work harder in order to provide the better end in business.

While a lot of people are encouraged to start their own business in order not to be shackled as an employee in a company, perhaps just as many people are afraid to take the risk. There are so many things involved when it comes to starting a business. If you want a higher probability of success, you have to be technical about it. There should be a feasibility study involved and you should have the right formula implemented. Other than that, there is also the physical strain of going from office to office to get licenses, certifications and permits. There is also the matter of getting the right venue and hiring the right people. To top it off, you need to have a large-enough capital to get you through the first months of operation — some amount could also be used for marketing. You also need to consult an adviser on entity formation, so you can maximize your tax benefits.

However, if you just look at it in a holistic level, starting a business is a step toward the right direction. As long as you have the right grip on it, the benefits from starting your own business will outweigh the downside. Just imagine how many people will benefit from just one business. Every business has a ripple effect to the community and to the government, which also goes back to the society.