Written by Tianqi (George) Sun
When talking about entrepreneurship, people’s minds always divert to companies such as Amazon, Apple, Microsoft, and Meta. To most people, these businesses are the pinnacle of gathering resources and benefiting the United States by providing thousands of jobs. Even lots of kids dream to be famous entrepreneurs like Jeff Bezos, Elon Musk, or Warren Buffet. Although this might be true on a national level, local businesses contribute more to the local economy than large corporations. Small businesses have more of an impact because the local business contributes to the local expertise, direct community reinvestment, and the resilience and sustainability of the local economy (Rowinski, 2023).
The intrinsic value of local businesses includes the local expertise and cultural significance that outweighs some large corporations. Local businesses often tailor their product specifically to the local community. As the demand changes for the products consumed in the local economy, they adjust to it extremely quickly (Brennan, 2023). Swiftly adjusting to demand is extremely difficult to accomplish in large corporations because they cannot change the product when only one specific region changes their consumption behavior. So for the local economy, small businesses encourage people in the community to consume more of their goods because of their customization (AIContentfy, 2023). The community’s culture will also be better preserved by local businesses. The focus of large corporations is different as they want their product to be as replicable in as many areas as possible to profit. They do not take into consideration local culture, tradition, and landmarks because that will decrease their efficiency and lower the outreach of that product. An example of this would be McDonalds. McDonalds has had the basic menu in the United States without too many changes for years, and they do not make any adjustment to their food’s taste based on specific regions. For instance, in Maine, people might be more used to the savory taste of the lobster roll, as moving down south to Nashville, the locals might enjoy the spicy flavor more. Large corporations can’t make these adjustments because it is not coherent with their brand. Local businesses, however, often embody the history and stories of the area based on traditional celebrations to become the face of the community by cherishing the history and culture.
Direct community engagement and reinvestment also makes local businesses stronger supporters than large corporations. Local entrepreneurs often find an emotional attachment to the community, thus choosing this place to start their business.People tend to gravitate towards individual’s businesses they personally know. Thus, local entrepreneurs always love to build personal connections with their customers and be active in their community to promote the product to get as much popularity from the locals as possible. In contrast, to reach those large corporations’ CEOs, there is simply no way. No matter how many emails you send to them, 99% will not respond to it. If they do, they have no interest in building personal relationships with customers , because there are just too many. The local businesses tend to hire locally, ensuring that money stays within the community and fostering local employment (Cumberland, 2023). People who got hired by large corporations might move around because there are plenty of offices to locate to rather than hiring in the local community. For larger corporations, it is more cost-efficient to reallocate one already trained employee rather than hiring one in the local community to go through the application and training process. This is not possible for the local business because people from other areas are less likely to move because the brand is not as big. The only option is for them to hire locally and reinvest the resources back into the local economy.
The resilience and sustainability of local businesses make the local economic landscape more diverse and adaptable. Large corporations can give up a region’s sales easily if things do not turn out well in a business sense. However, it is impossible for local businesses to do so because the local customer base is the only one they have. Local entrepreneurs usually have less cash flow to start the business. For plenty of them, being an entrepreneur is a huge risk. They have to give maximum effort in order to make the business sustainable and profitable, which contributes to the local economy more. Another advantage of the local businesses is diversifying the local economy. Large corporations are mainly focusing on one industry. Thus, the economy is going to be greatly affected locally if there is an industry downturn. However, since local businesses are smaller sized and more industries could be covered, one industry’s downturn would minimize the negative impact on the local economy (AIContentfy, 2023).
Local businesses hold a distinct intrinsic value that is invaluable to the communities they serve. With their direct community reinvestment, resilience, and sustainability, local businesses make themselves more beneficial to the local economy than some large corporations. By providing increased support to small entrepreneurs, local governments can nurture a thriving ecosystem. These local businesses bolster the overall health of the local economy and will become its backbone.
References
AIContentfy Team. (2023, October 6). The impact of small businesses on the economy: Supporting local growth and job creation. AIContentfy. https://aicontentfy.com/en/blog/impact-of-small-businesses-on-economy-supporting-local-growth-and-job-creation#:~:text=By%20providing%20goods%20and%20services,and%20innovation%20to%20the%20economy.
Brennan, M. (2023, February). Importance of incorporating local culture into community development. Penn State Extension. https://extension.psu.edu/importance-of-incorporating-local-culture-into-community-development
Cumberland Area Economic Development Corporation. (2023, April 25). How small businesses impact their communities: CAEDC. Cumberland Area Economic Development Corporation. https://cumberlandbusiness.com/news/how-small-businesses-impact-their-communities/
Rowinski, M. (2023, September 12). Council post: How small businesses drive the American economy. Forbes. https://www.forbes.com/sites/forbesbusinesscouncil/2022/03/25/how-small-businesses-drive-the-american-economy/?sh=1e4f97444169