Businesses help the economy; that much is certain. And while many believe that this is only limited to large corporations, the truth is that even smaller businesses offer a considerable boost. Let’s take a deeper look at how micro-businesses impact the economy.
What Are Micro Businesses?
In simplest terms, micro-businesses operate on a very minute level — one that has six or fewer people. Of course, even a small to medium enterprise with less than a dozen employees can count as a micro business. The defining factor is that it’s considerably small in manpower and resources and does not require $50,000 to start. Micro companies and small-to-medium enterprises (SME)
How They Help the Economy
Despite their seemingly small stature, small-to-medium enterprises are not one to be ignored. They have considerable contributions to the national economy, and globally, micro and small business statistics are consistently rising- at incredible rates as well. But how exactly do microenterprises benefit everyone? Here are a few reasons.
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Circulates and Simulates the Economy
Small businesses circulate money, especially in a domestic setting. It generates movement in the market, from the simple act of purchasing from them to the company purchasing the materials they need for their business, back to their providers earning and paying their workers.
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Provides Domestic Opportunities
While micro businesses don’t exactly employ a large number of people, they still provide job opportunities. This is where micro-businesses shine the most: they’re willing to hire people otherwise unable to get employed by larger businesses. And because SMEs tend to work in a far more flexible arrangement, they can also offer flexible working options to those who need it the most, like working students or single parents.
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Customizes Customer Experience
Thanks to its small yet personalized nature, SMEs are better capable of fitting and adjusting to their customer’s needs and expectations. Making very personal requests (and remembering these requests) has long been part of local business culture. The customer experience one can get in an SME is often far more organic than those of larger corporations, giving them a considerable edge for customer satisfaction.
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Adds to Local Taxes
And, of course, SMEs add a considerable amount of money to the national tax. It’s large enough that they take up over 90% of businesses that drive economic growth. Indeed, the impact and advantages small companies bring to the economy cannot be denied.
How Technology Helps
But how do micro-businesses achieve all these? Through the great equalizer: technology and the Internet. Through the clever use of available technology, micro-businesses can push the limits of what they can do and offer their services to a broader audience. Below are some examples of how businesses utilize technology to their benefit.
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A Platform for Selling
A physical store used to be a requirement for a business. After all, you need an avenue to sell your wares. But thanks to the internet, having a brick-and-mortar store isn’t all that critical anymore. There are many online selling platforms, many of them baked into social media networks with millions of users. This allows small enterprises to access a broader market segment, even marketing directly to people who are more likely to utilize their services.
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Online Monetization
With a platform to sell their wares, small businesses can now generate income through non-sales streams. By monetizing their Facebook page or Instagram account, they can generate revenue from page views, provided enough traffic and attention. This is in line with the new shift to more personable and relatable marketing materials, often ones that generate a considerable amount of viral attention.
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Dropshipping and Other Merchandise-based Selling
With the improvements in reach and communication, businesses can now utilize the market chain to expand their business. Dropshipping, for example, is a popular way for niche businesses to provide items and wares to interested parties. Another way is purchasing blank goods, like blank shirts, caps, or mugs, and then putting their own spin on it. These services are now accessible thanks to online stores that allow for customization and lower stock demand.
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Efficiency Tools and Software
Efficiency is something all businesses strive towards. And with the use of online and digital tools, even small businesses can match a level of efficiency otherwise unavailable to them. From basic word processors to full-blown accounting software systems, there’s software for each business task. Some of them are free, some proprietary, but they’re all accessible even to SMEs.
As the trend shifts from patronizing large corporations to patronizing locally-owned businesses, the statistics are only increasing. Perhaps the future that’s waiting for all of us is one where small businesses are dominant. Regardless, we’re all looking towards the growth of the small business industry.