I know most people can agree with me that the fresh, homemade taste of a cup of coffee from a local café is far superior to that from a large chain. Imagine if these local cafes didn’t exist? The diversity, and liveliness of our communities would definitely diminish. The same goes for local restaurants, gift shops, and all the hidden gems and services that make a community unique and beautiful. All these local shops fall under the category of small and medium sized enterprises (SME) which are defined as companies employing less than 500 people.
Let’s break this down further. Micro businesses employ 1-4 people, a small business employs 5-99 people, and medium sized businesses employ 100- 499 people. Nowadays, SMEs are not only important for bringing more options to a community, they actually add more value than you may think. Here are three reasons why small businesses are essential to local economies.
1. Job Creation
Small businesses comprise the majority of the private sector labour force in Canada. Within our country, SME’s are responsible for creating 150,000 jobs per year! With the creation and establishment of small businesses, entrepreneurs are bringing value to their communities through job creation as well.
As the world has witnessed in the past year, it is almost impossible to anticipate what is going to happen in the future. There are always unknowns and unprecedented changes will arise. As a small business, it is often easier to adapt to those changes than it is for a large corporation. This ability to respond to changes in the operating environment promotes continuous innovation. Being forced to develop new procedures, and new methods of problem solving (in order to survive) is part of the entrepreneurial process from the very beginning. Small businesses have to consistently refocus operations – which often results in efficiency, streamlined procedures and flexibility.
3. Community Support
When you are purchasing from a small business you are not only supporting the business itself, but you are putting money back into your own community. Community Futures’ research shows that for every $100 spent locally, $68 remains in the community. Businesses are also well known for supporting charitable initiatives within the community. Therefore, by supporting a small business you are allowing them to continue investing in worthwhile initiatives. Small businesses also drive tourism, further contributing to the local economy and reputation of the community.
Small businesses are the backbone of our communities; being a small business owner is one of the most rewarding careers one can pursue – allowing you to create valuable connections and achieve great personal satisfaction. With technological advances, it is easier than ever for people to penetrate new markets (something that for many years was far more difficult in the absence of significant financial capital).
If you are contemplating starting a small business, consider this: there is never going to be the “perfect” time, and there is no time like the present. If you have a great idea, and you are committed, this is your sign to take the plunge.
Remember that you are not alone, there are many great programs available (many are government funded), like our Venture Accelerator Program – and we are eager to help.
Don’t forget to share and tag your favorite small business in your community to show your support!
– From the desk of Monika Mann, Economic Research Officer
If you would like to contact us with any questions, please feel free to comment below, call us at 250 563 2663 or email officeadmin[at]hubspace.ca