With the UK’s current recession it’s important to define why the impact on small businesses during the pandemic has had a considerable impact on the economy. Of course, it’s simple to say fewer businesses in operation means less money flowing through, but why particularly are small businesses so important for the economy?
Creating new jobs
First and foremost a small business regularly creates job opportunities. Predominantly offering chances for graduates and BAME members to showcase their skills. Skills which are regularly being sought out alongside experience in larger corporations. Anyone can create a small business. It takes a lot to grow and develop that business further, but the initial creation is open to everyone. As the company grows there will be a need to bring in people to handle the daily operations. Creating more job opportunities, and more money for those new team members. Which they can then spend to sustain themselves and live more enriched lives.
These job opportunities also enrich the local community by employing local people around the new company. When big corporations establish a new base of operation within a city the population increases within that city. Which is why, in 2017, we saw many cities bidding to secure amazon’s new headquarters. Job growth within a local area helps those communities bid for renovations, transport links and housing.
Collaboration and Competition
All small businesses offer something new to the world. Whether it’s taking an existing product and challenging it’s delivery or tailoring specific services to those that need it the most. Small businesses breed resourcefulness and innovation. Without them, big businesses wouldn’t need to change and they certainly wouldn’t be challenged to the degree they are now.
Small businesses can also enjoy fewer restraints that can come with much larger businesses. Easier to change policies, procedures and products without any lengthy procedures. Without limitations, local business can continuously be fresh and appealing for new clients.
It isn’t all competition, however, as many small businesses design services around collaborating with big businesses. Suppliers, designers and even small corner shops all play a role. Big businesses rely on small businesses to handle specialised projects or manage a few elements of the day to day business. Such as cleaning offices, managing websites or distribution within a local area. Of course, some businesses choose to have a full in-house team to manage these areas, but a variety of businesses are more than willing to contract a small business to do the job.
All of this collaboration and competition drives money through the economy and even when small businesses fail the impact they’ve had on the area is noticeable. Revenue was generated, distributed and flowed through the economy. Mistakes that were made were logged, understood and ready to be navigated around for the next venture. Unique businesses inspired new business owners, new ideas and better customer service.
What this means today
Unfortunately, a recession and a weak economy discourage new potential business owners from start-up ventures or expansion. Impacting job growth and hinders our ability to grow the economy. Trying to start or grow a small business in uncertain times can cause a lot of stress and challenges, which is why everyone needs to band together in this period.
Offer advice, engage and help people grow when you can. Every business right now needs that collaboration and sense of community.