Small businesses are vital

 Small businesses are vital to the local economy. Truth or “Alternative Fact”?

The newspapers and business journals tend to focus on the impact of large business and the winners and losers in the market; small businesses are small news. The impact of a particular small business may be small, but the accumulated impact of a number of small businesses on the local economy is significant. Each of those businesses supplies a local need e.g. hairdresser, vet, launderette and they are generally owned, staffed, supplied and supported by locals who therefore want to see them succeed.

“Residents of communities with highly concentrated economies tend to vote less and are less likely to keep up with local affairs, participate in associations, engage in reform efforts or participate in protest activities at the same levels as their counterparts in economically dispersed environments,” Troy Blanchard and Todd L. Matthews,

Or in simple “Saffa” lingo, “Local is lekker!”

My neighborhood has a resident WhatsApp group where we share information and promote our local service providers, based on our service experiences. We happen to be a very active community, taking care of our pavements, parks and local fauna by ourselves. It is this spirit of community that feeds into a sense of being invested, financially and emotionally, into the neighborhood. Small businesses and service providers benefit from this loyalty and they contribute to it in the form of sponsorships, expertise or materials. Being of the community, it is in their own best interest to be a part of the community.

A recent example of this reciprocal relationship between the community and small business was when the neighborhood moved to fiber last year. One of the local providers, whose CEO is also a resident, worked with the community providing hand-holding and technical advice at no cost.  Unsurprisingly, when it was time to sign up, the company received a massive ROI in the form of a 93% sign up. We have, in effect, created a healthy local economy – the village of old. Customers and businesses are intrinsically dependent on each other for the well-being of the community. We are often happy to pay a little extra for a product because of this give and take nature. The added benefit is that money spent in a local business, eventually finds itself back in the local economy through higher rates and taxes, this money is then available for local development. Larger businesses also benefit from the services of smaller businesses – every organization needs a plumber or caterer or security. Hence the wheels of the local economy feed into the larger one.

It’s a simple human need to feel that we belong or that we are recognized. We like to do business with people who know us and who are like us. I am not referring to race, creed or culture here, but to the sense of knowing that we’re all just ordinary folk with the same dreams of having a nice home and educating our kids. Over time, local business owners become a part of our daily life and we end up sharing conversations. I know that my vet’s daughter has just started at university and that the owner of the coffee shop is saving for a trip to England. I prefer to support them because I know I’m literally helping them achieve these goals.

Small businesses, by their nature, tend to be more responsive to changing customer needs and can be the source of little innovations. A customer may voice a need in conversation and the business owner is able to do something to meet that need without requiring authorization from three levels of management. Small businesses sometimes grow into large ones, bringing employment opportunities and stimulation to the local economy. South Africa’s unemployment rate is at 27%, if the development of small businesses can help to dent this figure in any way, then what are we waiting for?   If charity begins at home, perhaps so does the first step to financial independence.

There may be “alternative facts” to consider, but common sense leads to the conclusion that small businesses are vital to the economic and social well-being of local communities and ultimately, the larger economy.


Author: Janet Askew


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  • Most small businesses are NOT important because they never get to a level where they can employ or do employ. The owner is simply a worker in his own business. Small businesses will become important once we start to focus on building entrepreneurs that build businesses that grow and employ. Our over-focus on business success has resulted in entrepreneurship not delivering on its promises.

    Build successful entrepreneurs, and great businesses will follow.

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