The Importance of Small Businesses to Local Economies? present you the article about Small Businesses to Local Economies?


Two standards are used to define small businesses; one is the level of 500 workers for manufacturing and the mining industries and the $7.5 million in average annual gross income for non-manufacturing industries. Small Business Wikipedia. Different businesses reflect on having different sizes, you can read about the SBA’s Table of size standards. According to the U.S. Small Business Administration (SBA):

  • 99.7% of all the employer firms are small businesses.

  • Since small businesses generated 1995 64 percent of new jobs.

  • The small business paid 44% of the total private payroll in the USA.

A small coffee house for after work cap of coffee

Economic Growth

The small business section of the economic contribution has an important effect on the local community, bringing more growth and new kinds of business. Small business can provide jobs for people that are not acceptable to larger companies. It is easier for small businesses to attract new talents and let them implement a new approach to the traditional problems and ideas. Small businesses teams are close to the owners and have better opportunities to convince them to do a new thing, while large operations are slow moving and more conservative.

The exchange between the large and the small business is essential for both sides; there are services that the large companies need to contract or outsource smaller ones, it can be a law office or cleaning contractor. Each large operation grows a cluster of small business benefits its activity.

Adaptability to Changing Climates

Small business flexibility and fast adaption character can help with what is needed when economic climate changes. Being businesses that are very customer-oriented, they can expect not losing the customers at hard times. Four tips for being more flexible and adaptable

Schools and small businesses

You may ask what as schools have to do with small business?

When you buy a book from the bookstore located at your street corner, the money the store marked up stay at home and pay state and local taxes. This is where the school and the business are meeting, your municipality income is from taxes and is used at the local school budget. The more small businesses in town, the better schools it can afford. The better schools better and more professionals are looking for jobs. We can add the police department and the firefighters to the list.

Future Growth

It is expected that some small businesses will grow into big corporations, people start a business in their garage and grow into major players in the marketplace. At the beginning of the computer industry, computers could be assembled in the garage by the owners themselves.

Microsoft sold an idea, a disk with some software on it. Some large corporations were staid at home where they started creating more jobs and more small businesses to supply the big brothers with services and stuff.

Some Different Types of Small Businesses:

There are endless options for small businesses that people can choose, and variations of the same as many as the people that are venturing into this world of small business. Most small-business are of certain categories which have differences in legal structures of ownership, size, location, and brick-and-mortar or virtual.

Find Your Niche:

You can look for an option for your long time dreamed small business in this list Need a Business Idea? Here are 55. Service-based self-employment opportunities are commonly recommended for starting in your community. Repair jobs, Dog walking or virtual jobs are good for starting; your independence will be kept so you would be able to look for the opportunity to grow or jump into something better or grow bigger.

Legal Status

Sole proprietorship or partnership is the most simple legal form for starting a small business.

Taxation is as simple as the personal tax return, and it worked together on the same tax forms.

With this legal structure you the liability is 100% you own so there is no protection from unpaid debts or any damages to pay because of the business activity. Creating a corporation is the opposite you do have to register and pay taxes as a legal persona. Your liability has limited protraction.

The variant of S Corporation is a better option for small business. Your income is treated as Passed through to your tax return.

The common option is the LLC Limited Liability Company, which is a combination of liability of a Corporation and taxed like a partnership. The preferred Business structure under the 2017 Tax Reform

Barbers shop is a small business

Independent Contractors:

When you work on your own like a plumber, a party planner or a freelancer writing blogs for occasional clients you may belong to the category of an independent contractor. Any job you got is a new contract. You work for yourself and pay taxes on your own. An independent contractor has file quarterly estimated tax. Most of the contractor is a home-based business.

A Plumber at work

Physical or Virtual Location:

Your business can be a website with e-commerce selling an electronic product like pay stubs or other real product like cell phones or a brick and mortar storefront or an office. A lawyer or caterer will have a physical location from where they work meeting clients and keeping tools and materials of the trade. A blog writer or translator may be using the Internet by using a website. Other people can be on the Internet with a website that shows the catalog or works they had done before.

Ownership Criteria

There are some special criteria of under-represented groups that were created by the Federal and State governments setting aside some limited quantities of contracts for minority-owned businesses and women-owned businesses. Small businesses that are owned by veterans of the U.S. military, including some disabled veterans.

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