Do Small Businesses Affect the Economy?

If you’re wondering if small businesses have an effect on their local economies, the answer is an unequivocal yes. Plus, their impact is a positive one. According to LinkedIn, the fact that money from small companies tends to stay in their local economies is a main benefit. Let’s take a closer look at a few of the ways that small businesses affect local economic development.

Keep Money Local

When a multinational company moves into a local area, its profits are generally funneled back to its home region. With small businesses, the opposite is true. The profits earned are usually put back into the companies to help them grow and spur the area’s economic development. Employees are local citizens and they spend their wages in the local area, thus giving the economy another boost. The amount of money that small organizations are responsible for circulating in the local economy may surprise you.

Give Back to Their Communities Financially and Civically

Are you active in your local Rotary Club? Have you attended Chamber of Commerce or Kiwanis meetings? You might have noticed that a lot of the participants, as well as the group’s leadership, were local mom-and-pop and small business owners. There’s a reason why robust communities have active business owners helping to spur the economy further. They care about their communities and want to see them grow and improve. This involvement can trigger further economic development outside of their companies.

Provide Growth Opportunities for Employees

Economic growth can be a challenge in smaller or struggling markets. With active small business owners leading the charge, their organizations can help improve many people’s lives. From on-the-job training to educational opportunities, the benefits of working with a microbusiness are many. They improve the lives of local citizens as well as enhance the overall community and economy. Now’s an ideal time to learn more about the many benefits that come with having small businesses in your area!

Here at ActivateDetroit, we are passionate about helping entrepreneurs grow their companies. If you’re interested in learning more about economic development and how small organizations help the local economy thrive, contact us today. We’re happy to answer your questions and enhance your opportunities in Detroit!