One may not give importance to small and medium scale businesses as they do to others. Yet, these businesses are what play a major role in the economies of most countries, contributing in various aspects that you might have not been aware of. These businesses are primarily engaged in retail trade. While many have not yet realized why they should give significance to such businesses, some countries have already identified their importance. The following will highlight the importance of small business to a country and why we should never underestimate the role played by them in any country.
As mentioned earlier, small businesses allow customers to fulfil their need of purchasing retail products and services. In real time instances, when comparing the UK and USA, economists believe that USA has much less restrictions to growth than the UK, allowing their retail trade to expand to international operations. Therefore, the US consumers are at an advantage where they can buy their goods from either small scale retailers or from giant retail companies like Target or Wal-Mart.
Companies always aim to increase their efficiency and effectiveness; in other words, they need to increase productivity as much as possible in their operations in order to compete in the market and to be able to supply for the demand of the customers. It has been prove that while large businesses employ 32%. Therefore, novelty and patents created in small and medium scale businesses tend to be much higher than that of large companies.
While the cost of living keeps going higher and higher, everyone is seeking for jobs to survive in the world. These small scale businesses have been able to successfully offer many employment opportunities to the country, boosting the economic growth while also providing jobs to those helpless souls that are seeking to earn for their daily meals. Therefore, it has clearly been a contributing factor to the country’s GDP.
When the business is smaller, the interrelationships that can be built with the customers tend to be stronger. Hence, they are able to know the exact needs of their target market and is able to come up with new methods that can fulfil these needs of theirs. This paves way for them to innovative ideas that will boost business growth with the few ranks of managers due to the less complex hierarchy.
Do not underestimate the contribution of small businesses to the economy, as they are the ones that will be able to boost the economic growth of a country.