The Impact Of Small Businesses To The Economy

Many say that small businesses are easy to start

. Yes, they are right. However, these kinds of ventures are difficult to maintain because of being prone to several economical setbacks. Nonetheless, they have some positive impacts, at least to the economy.

Economical Advantages

1. No matter how small, businesses of this size is still an opportunity to employ a significant number of people from the unemployed sector. As a matter of fact, many countries are filled with tiny-sized businesses that employ over half of their total workforce.

2. Despite their size, tiny businesses are still considered as competitors to more established firms. This helps prevent price monopoly and make product offers more competitive to all consumers.

3. Big businesses often start small. It is with this ideology that small firms are better able in innovating new business ideas that can help reshape the market and improve the overall efficiency of the present industry. They have the potential of becoming tomorrow's market leaders. Furthermore, these businesses can slowly engage in the art of exportation, which greatly helps the national economy.

Economical Disadvantages

1. The government usually pays less attention to smaller sized businesses. The former often focuses more on bigger firms that has the power to inflict immediate changes to the economy.

2. Most tiny businesses do not receive proper assistance and guidance from the experts and from the government itself. Even if it might be best if the government will offer some aid to them to make sure their success, this is not encouraged because it might cause interference in the market.

3. To add, some governments impose the same rate of taxes to small ventures as compared to bigger ones. This is practically one of the reasons why the business playing field is not fair to begin with between the small and big businesses.

What the Government Can Do

The business situation could become better if the government offers easy-to-avail loans for those who want to start-up new businesses regardless of size. Today, capital is one of the biggest factors to consider that ensures the life and continuity of a business. Unfortunately, this is often what a small business lacks. In addition, the government could give special grants to businesses that are willing to operate in underdeveloped sectors of the nation, most especially those with high unemployment rates. Lastly, it is the responsibility of the government to offer free training to those who are aspiring to become successful entrepreneurs.

by: Kurt Ross

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