Time and time again small businesses have been referred to as “the backbone of the U.S. economy,” and they create millions of jobs across the country. According to the Small Business Administration (SBA), the approximately 28 million small businesses in America account for 54% of all U.S. sales, provide 55% of all jobs and 66% of all net new jobs since the 1970s, and the 600,000-plus franchised small businesses in the U.S. account for 40% of all retail sales. Furthermore, the small business sector in America occupies 30-50% of all commercial space, which is an estimated 20-34 billion square feet.
This means the impact of small businesses on the U.S. economy is anything but small. Small businesses help stimulate not only the national economy but local economies by providing jobs and growth to communities. As small businesses are customer-centric, they can also readily respond and adapt to changing economic climates. How? Because of customer loyalty, which further strengthens local economies due to the fact that when people patronize their local small businesses, they are giving money back to their communities.
Local small business can generate substantial revenue and, subsequently, pay higher local taxes. These taxes are used to help sustain the community; for example its schools. Over two dozen studies about the value small businesses bring to local communities show that every dollar spent at a local business leads to two to four times the amount of jobs, income and wealth, tax collections and charitable contributions. In fact, approximately 90 percent of small business owners donate money to charitable causes, while 70 percent contribute time and money to charity.
Additionally, small businesses require little infrastructure, compared to giant chain stores, and make more efficient use of public services, which positively impacts the environment. Small businesses are known to be better for local environments, whereas big box stores can be detrimental to the environment as they frequently build on the outskirts of towns, paving large areas for stores and parking lots and drastically altering the landscape while contributing to suburban sprawl. The positive impact of small businesses on not only the economy but the environment and local communities is quite substantial.