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As the narrative around global change shifts from the responsibility of the individual to the collective power of businesses and small companies to effect meaningful change, it’s time to begin a dialogue around how your small business can make a visible difference in an authentic and purposeful way.

Start-ups and Small Businesses have an agile advantage when it comes to implementing these features in the workplace, whether it’s ditching plastic water bottles, changing out the lights or sponsoring tree planting in deforested lands. This article discusses how small companies can play their in contributing to global change.

  • How do Small Businesses Contribute to the Global Economy?
  • How do Small Businesses Contribute to Society?
  • Do Small Businesses have the Opportunity to Participate in the Global Economy?
  • How can Small Businesses use Globalization to Their Advantage?
  • What is the Role of Small Business in Economic Development?
  • How Much do Small Businesses Contribute to the Economy?
  • What are the Benefits of Small Business?
  • What is the Role of Small Business?
  • What is the Simplest Way for a Small Business to Globalize?
  • What are the Advantages and Disadvantages of a Small Business?

How do Small Businesses Contribute to the Global Economy?

The importance of small business to local communities is emotionally rooted in buying and selling with friends and neighbors. The importance of small firms in rural areas and big cities also is seen in the economic benefits of shopping locally. In some towns and villages, a small business is the only type that can survive while serving a reduced population.

Read Also: The Common Products that Consumers Purchase From Small Companies

In a big city, small businesses often offer a more diverse inventory or specialize in providing unique or personalized customer experiences. Small businesses also present new employment opportunities and serve as the building blocks of the United States’ largest corporations.

Growing Small Businesses in the U.S.

A small business is defined as a business (corporation, limited liability company or proprietorship) with 500 employees or less. According to the U.S. Small Business Administration (SBA), small businesses represent 99.9 percent of all U.S. businesses.

Small businesses created 1.9 million jobs in 2015 with some of the smallest firms – those with 20 employees or less – adding over half of the positions with a 1.1 million increase. As of 2022, the SBA estimates there are 33.2 million small businesses employing a total of 58.9 million workers.

Employing Local Workers

Small businesses contribute to local economies by bringing growth and innovation to the community in which the business is established. Small businesses also help stimulate economic growth by providing employment opportunities to people who may not be employable by larger corporations.

Small businesses tend to attract talent who invent new products or implement new solutions for existing ideas. Larger businesses also often benefit from small businesses within the same local community, as many large corporations depend on small businesses for the completion of various business functions through outsourcing.

Adapting to Changing Climates

Many small businesses also possess the ability to respond and adapt quickly to changing economic climates. This is due to the fact that small businesses are often very customer-oriented and understand the needs of the community. Many local customers remain loyal to their favorite small businesses in the midst of an economic crisis.

This loyalty means that small businesses are often able to stay afloat during tough times, which can further strengthen local economies. Small businesses also accumulate less revenue than larger corporations, meaning they may have less to lose in times of economic crisis.

Contributing to Local Government with Taxes

When consumers patronize local small businesses, they are essentially giving money back to their local community. A thriving local business will generate high levels of revenue, which means that the business will pay higher taxes, including local property taxes. This money is then used for local police and fire departments as well as schools.

A thriving small business also can improve property values throughout a community, improving every homeowner’s bottom line while generating more property taxes for local governments.

The small business impact on local economy growth also takes the form of sales tax collection. Local businesses charge sales tax based on their location and can be the backbone of special taxation districts focused on unique projects, such as lighting and sidewalk projects to improve historic shopping districts and attract additional customers.

Growing a Small Business to a Corporation

Small businesses do not always stay small. Large corporations, such as Nike and Ben and Jerry’s, started off as small businesses and grew to become major players in the national and international marketplace. Many computer-industry leaders began as “tinkerers,” working on hand-assembled machines out of their garages. Microsoft and Amazon are prime examples of how a small business idea can change the world.

Small businesses that grow into large businesses often remain in the community in which the business was first established. Having a large corporation headquartered in a community can further help provide employment and stimulate the local economy, creating a market that favors the development of additional small businesses.

How do Small Businesses Contribute to Society?

Small business is the backbone of our community. As the foundation for our economic wellbeing, local businesses employ locally and provide critical goods,  services and tax dollars that directly contribute to the health of our community.  In addition, our small businesses contribute to our economy by bringing growth, innovation and character.

Small businesses are the lifeblood that keeps the American economy functioning.  According to a report issued by the Small Business Administration (SBA) in 2019, small businesses account for 44% of economic activity in the United States. Small businesses create two-thirds of new jobs and deliver 43.5% of the United States’ gross domestic product (GDP).

Here’s how a small business contribute to the society:

  • Create job opportunities
  • Get more money circulating in the local economy
  • Keep taxes close to home
  • Build community identity
  • Encourage entrepreneurial spirit
  • Promote community involvement

When citizens buy from a small business, their money goes to pay for a local employee, who goes on to spend money locally.  Studies show that if you spend $100 at a local business, roughly $68 stays within your local economy.  It’s a chain reaction that serves the entire community.

When progressive communities – like Downtown Flowery Branch and the Historic Gainesville Square – are filled with unique coffee shops, lofts and apartments, locally owned restaurants, art galleries, microbreweries, concert venues, design shops and quirky boutiques – together with a large number of strong, non-retail players like architects, real estate agencies, nonprofits and attorneys – that downtown is often the heart and soul of a vibrant community.

A strong small business presence is what gives a community its character. It creates that sense of “place” that attracts tourists, young people and empty nesters, a talented workforce, and more businesses and investors who drive further growth.  This is what we are currently seeing throughout Hall County, specifically in the historic communities of Downtown Flowery Branch and Downtown Gainesville.

Do Small Businesses have the Opportunity to Participate in the Global Economy?

Small businesses play a critical role in the global economy, contributing to economic opportunity, diversity and the overall health of our communities.

In India, the 46 million micro, small and medium-sized enterprises (or MSMEs) reportedly account for nearly 30% of the country’s total employment. And recent studies show that in China, MSMEs make up 97% of all businesses, 80% of urban employment and 60% of total GDP. The success of these businesses is critical for the economic health of their communities.

Companies like PayPal and Facebook, for example, are partnering to enable digital commerce in new contexts, like on social media. Through partnerships like these, even the smallest of businesses can open their doors to global consumers in the new contexts in which commerce is emerging.

By working together across the technology and financial sectors, we can democratize access to the tools that can help create opportunities for businesses of all sizes.

Even in upper-middle-income countries, less than 30% of small businesses and less than 40% of medium-sized businesses sell online.

Small businesses need access to digital tools that open them up to global audiences. The financial, technological and logistical tools that can help small businesses enter global markets, exist today. Through partnership, we can make these tools more accessible.

Together, the public sector and trade associations can invest in educating local entrepreneurs about the importance of digitizing their businesses and selling internationally. Local businesses looking for ways to grow, impact investors interested in financing social good projects, and fintech companies that can provide the needed technological and financial tools, should work together to expand access to these capabilities.

This will help drive commerce to millions of the small and medium-sized businesses that are responsible for so much economic growth and employment.

How can Small Businesses use Globalization to Their Advantage?

Small businesses are organizations owned by private parties, have a low number of employees and earn quite less revenue than a larger business. The maximum number of employees a business can have to be qualified as small as 500 and 1500 in wholesaling and manufacturing, respectively in the USA. The annual receipts of a small business are less than $21 million.

Businesses are interested in qualified as small due to the many perks that small businesses receive in the form of government incentives: subsidies, grants, and aids etc. Small businesses are a very integral part of an economy. Together, many small businesses generate high revenues for the economy and hire a large number of people. These small businesses have a potential of becoming larger in the future if they work effectively and passionately.

Now, let us get back to the advantages of globalization for small businesses.

Cheap Labour

Small businesses get access to cheaper labor. Globalization leads to increased movement of labor from one country to another, so small businesses can also benefit from this along with larger businesses. Adding to this, they get a big pool of labor to choose from which has workers of all specialties, talents, education and so on.

With globalization taking place, small businesses do not need to rely on local labor which might be expensive and not much efficient in the job needed. Labor from abroad also bring with them new practices and ways of doing things.

Technology

One of the advantages of globalization to small businesses is the technology. Firms from abroad bring with them newer technology and expertise which can lower the costs of small businesses by reaping the economies of scale. Moreover, high-tech machinery would make the production of standardized and good quality products possible, and these machines are good enough to not break down again and again.

Better Funding

Small businesses get access to better funding during globalization. Possibilities for receiving investments and loans increase. There are many banks and other organizations that are especially present to fund small business start-ups that have good business ideas, but do not have the required investment to turn their ideas into reality.

Moreover, Small businesses have much more opportunities of expanding in a global economy as compared to a single economy. A small business specializing in something can sell its products in different countries. These products are mostly handmade, crafty goods which have high demands in many countries and can generate high revenues.

Low Costs

Another one of the advantages of globalization for small businesses is the low costs. With globalization, comes the possibility to outsource much work to other specialized firms. These firms can do the same work at much lower costs. Moreover, these specialized firms can enjoy economies of scale due to a large amount of production. So, they face lower costs, and hence, their prices are low too.

Adding to this, small businesses can get cheaper raw material and labor (as per earlier discussion) for production from other countries while the prices locally might be higher. Many of the trade barriers including tariffs and quotas are not put upon small businesses. This allows the small businesses to enjoy these cuts in barriers by exporting more finished goods to other countries and importing cheap raw materials from other countries.

Boost to tourism

Globalization gives a rise to tourism too. Tourists spend lots and lots of money while visiting other places. Now, a large chunk of the tourism industry comprises of small businesses offering specialized services. These services for customers include things such as souvenirs, hotel services, food services, recreational activities and so on.

The tourists give a rise to revenues of these small businesses. They, in turn, hire more employees to meet the increase in demand. This benefits the entire economy not just one particular small business.

What is the Role of Small Business in Economic Development?

Small businesses play a vital role in the economy. Think of the luxurious car that you see on the roads daily. The final product is the outcome of many small businesses that are integral parts that help the engine to run. It is these millions of small industries that get you the dream car. It has been seen that 65-75% of the innovation comes from small business industries.

Below, we look at the major role played by the small business using India as our example.

Industrial Units:

In an economy like India, the majority of the industrial units are because of small business. This today accounts for more than 95% of the units. Almost 40% of the total industrial units are contributed because of the small industries. The small businesses are bagging around 45% of the total exports that happen from India.

Labor – Oriented:

Small businesses generate a lot of labor. They give many employment opportunities to those living in rural and semi-urban areas. The small businesses help to lift the weight of unemployment in any economy. This is a significant role that they play predominantly in a country like India.

India has a large labor force and the Indian government also encourages small industries that employ and utilize labor. The government encourages small businesses by drafting various policies and offering low-interest rates.

Human Resource:

The small businesses rank next to agriculture to employ in the Indian economy. As compared to many big companies, the small businesses are capable of generating the maximum employment opportunities for each unit of capital that is invested. This makes the small business the second largest employment generator in the economy.

Utilization of Local Resources:

The local community needs and demands let the small businesses to emerge in the semi-urban and the rural areas. The small businesses are community-based, and these are focused to work for and generate employment in a few areas.

This lets any business utilize local resources like talent, raw materials, demographic opportunities and labor. When there is ample mobilization and utilization of any local resources, this helps to improve the economic condition of a particular area.

Flexible and Adaptable:

Any new business opportunity gets captured at the correct time. Small businesses get an edge when it comes to adapting and growing in the light of any upcoming changes. The small business usually is the manufactures and the distributors, and they are thus capable of generating a personal touch with the business and with their clients as well. There is also no government intervention in the case of small businesses as these are limited in finance and size.

Promotes Development & Growth:

Development of the region plays an important role in contributing to the country’s development. The establishment of small businesses in any region or area helps to uplift the lifestyle, earning of the people residing. Businesses bring in more exposure to foreign markets, production scale and the overall evolution of state as well as workers. 

Increased Tax Revenue:

The industries need to pay the required amount of tax to government bodies, which is in turn used for the development of rural regions and to fulfill the demands of cities. When businesses operate, they do look for profits. And when more profits come in, more taxes are devoted to the government of the country. The taxes therefore generated are contributed to upliftment services such as healthcare, education, defense field and many more. 

How Much do Small Businesses Contribute to the Economy?

Small businesses are the lifeblood of the U.S. economy: they create two-thirds of net new jobs and drive U.S. innovation and competitiveness. A new report shows that they account for 44 percent of U.S. economic activity. This is a significant contribution, however this overall share has declined gradually.

U.S. gross domestic product (GDP) is the market value of the goods and services produced by labor and property located in the United States. Across the 16 years from 1998 to 2014, the small business share of GDP has fallen from 48.0 percent to 43.5 percent. Over the same period, the amount of small business GDP has grown by about 25 percent in real terms, or 1.4 percent annually. However, real GDP for large businesses has grown faster, at 2.5 percent annually.

“This useful benchmark shows us that small businesses continue to be big contributors to the U.S. economy,” Acting Chief Counsel for Advocacy Major L. Clark said. “While their contribution has grown at a slower rate than that of large businesses, small businesses continue to be at the forefront of driving innovation, jobs and economic growth.”

Nominal small business GDP measured $5.9 trillion in 2014, the most recent year for which small business GDP data are available. The three largest small business sectors contributing to it were (1) the real estate and rental and leasing industry; (2) wholesale and retail trade; and (3) the manufacturing and mining sector.

The 2008 recession played a small part in the lower small business share, but structural changes may have played a part as well. These factors include long run declines in business dynamism, the rise of big-box stores, the changing regulatory environment and the critical role of credit availability.

What are the Benefits of Small Business?

Small businesses account for the vast majority of all companies in the U.S. and employ nearly half the private workforce, reports the Small Business Administration. Surprisingly, businesses with fewer than 100 people on their teams have the largest share of employment. Small companies are an anchor of the economy, creating job opportunities and driving innovation.

Entrepreneurship benefits both individuals and communities. Owning a small business can be an opportunity to grow professionally and reach your full potential. This journey can teach you new skills while allowing you to achieve significant financial rewards. At the same time, you have a chance to contribute to society as a whole and help others better themselves.

But when it comes to the community, the following are 7 ways in which small business help their communities.

They create job opportunities

According to the Government of Canada, small businesses employed 8.4 million Canadians, or 69.9% of the labor force. Likewise, according to Fundera, small businesses account for 64% of new jobs in the United States. Clearly, one of the most important ways small businesses benefit the community is by creating job growth and providing locals with job opportunities – an overall positive in terms of a healthy economy and a happy community.

They get more money circulating in the local economy

When customers patronize a local business, most of the money they spend will end up circulating back into the local community. Small businesses tend to outsource with other local businesses – for example, if a local coffee shop wants to find a graphic designer to create a new logo for their business, or if a local retailer needs to invest in some renovations, those small companies are more likely to seek out another small business in their local area instead of going with a large company.

Similarly, small business owners themselves tend to shop locally as well, as a way to encourage others around them to do the same. Owners of small businesses tend to eat at local restaurants and shop at local retailers, and often encourage their friends and family to adopt the same attitude. The salaries they make as business owners return to the communities from which they came – encouraging economic growth.

They keep taxes close to home

Likewise, one of the ways small businesses benefit the community is the taxes wind up back in the community. Taxes paid to small businesses, and the local taxes paid by small businesses, end up paying for community improvements such as schools, green space, public transit, and health care. Conversely, taxes paid to big corporations, or when shopping online, may not stay within the local circuit. 

They build community identity

Another one of the ways small businesses benefit the community is they become representatives of their community. They reflect the communities from which they come – having been founded by local entrepreneurs and maintained by local employees, small businesses are a portrait of the local area. Likewise, these businesses become part of the local landscape.

Think about it like this – if you’re walking down the streets of downtown or the city center, the ensemble of restaurants, coffee shops, and boutiques create the unique ambiance and charm of your city. They attract tourists and make locals proud of where they live. Small businesses are part of the community in a way big corporations simply are not.

They’re involved with the community

As a whole, small businesses and their owners tend to be more involved with their communities. Small businesses are more likely to contribute to charities, especially local ones. Small Biz Trends finds that 52% of small businesses donate to charity. Small business owners tend to also sponsor, organize, and host local events to maintain a lively community. Plus, as previously mentioned, giving locals job opportunities is another way small businesses help the community.

They innovate and diversify the local marketplace

To stand out among the crowd, small businesses have to be innovative and unique. They must do something different than their competition, or they risk disappearing. That’s why most successful business owners tend to be innovative, creative entrepreneurs with a one-of-a-kind idea. 

Not only does this encourage more innovation and growth within the community, but it also creates a more diverse marketplace. If your local businesses offer something unique, it adds to the tourist appeal of your area, gives your community a more distinct personality, and a diverse marketplace also leads to well-served and satisfied customers.

They’re better for the environment

Your business is good for the environment, too! Who knew there were so many ways small businesses benefit the community?

For one thing, local businesses tend to set up shop in pre-existing buildings. Bigger companies and corporations often get infrastructures built for them – leading to less green space in the community and more harmful materials. Small businesses don’t take more space – they use the space that’s already there, which is what environmental conservation is all about.

Additionally, small businesses also tend to carry locally produced products, or products from smaller manufacturers, both of which have much less impact on the environment.

Finally, small businesses tend to be in community centers where it’s more common to walk or cycle. This means fewer patrons and employees will have to drive to access the business.

What is the Role of Small Business?

Small businesses provide opportunities for entrepreneurs, jobs for neighbors and gathering places for communities. They’re rooted in the landscape where they grow, and they give back vitality and sustenance. Although running a small business involves taking greater risks than working for a large, established company, the rewards are both quantitative and qualitative, including broad-based prosperity and a web of symbiotic relationships.

Small businesses are important because they provide opportunities for entrepreneurs and create meaningful jobs with greater job satisfaction than positions with larger, traditional companies. They foster local economies, keeping money close to home and supporting neighborhoods and communities.

Independence and Autonomy

Although small-business ownership is a longstanding and traditional way of earning a living, it bucks an ongoing trend of large companies consolidating, building economies of scale and spreading homogeneity. A chain restaurant in the Midwest will be virtually the same as a version of the same restaurant on the East or West coast, and a pharmacy with locations across the country will reflect the same values, wherever it is located, whether it focuses on convenient delivery of pharmaceuticals or processed convenience foods.

In contrast, independently owned restaurants and pharmacies reflect the culture and needs of their neighborhoods. Local restaurants feature regional specialties, and local pharmacies may supplement their stock of pharmaceuticals with anything from jigsaw puzzles to t-shirts from area Little League teams.

Creating Meaningful Jobs

Two out of three new net private sector jobs are created by small businesses. That figure refers to the number of new jobs created after subtracting the number of jobs that have been eliminated. This trend has been reasonably consistent for 25 years, and has continued since the end of the Great Recession. Not only do small businesses create a significant percentage of new jobs, but the jobs they create provide high levels of job satisfaction.

It’s easier to take pride in your work and to feel as if your contributions make a real difference when you have a direct relationship with your boss, than when your company is owned by millions of shareholders, who live all over the world and the business is run by executives in a distant city.

Integral Parts of Local Economies

Small businesses are integral parts of local economies, helping to create webs of financial interdependence that foster broad-based prosperity. When you spend money at a privately owned local store, that money goes to pay a worker in your neighborhood, who, in turn, is likely to spend money at another neighborhood business.

The more that small businesses leverage their potential to support each other, the greater their capacity to create a thriving local business community.

This mutual support is also useful during hard times. If a local business is struggling, community members can bond together to help the struggling business get back on its feet through crowd-funding campaigns or old-fashioned word of mouth pleas. It is difficult to imagine a large corporation generating this type of energy and support.

What is the Simplest Way for a Small Business to Globalize?

Small businesses can enter the global market by selling directly to customers in export territories, marketing products through a local distributor, participating in a joint venture with a local business partner, or selling through a website. Each strategy provides your business with a different level of cost, risk and control.

Research

Before you decide which strategy to adopt, carry out preliminary market research. You can find information on global market opportunities and sources of help on websites such as USA Trade Online. Use the data on the website to identify territories that have a demand for your products.

Check local business and safety regulations to see if you need to modify your product, product name or packaging to comply with local legislation or cultural requirements. The U.S. Commercial Service, the export-promotion arm of the Commerce Department, has Foreign Service officers stationed around the globe, and is a valuable source of both general and country-specific information.

Website

Selling your products through a website is a simple, low-cost way of entering the global market. Customers and prospects around the world can visit your website at any time to select products and place orders. To improve your chances of success in key export markets, prepare website pages specific to the territory.

Provide product information in the local language, with prices in the local currency. Selling to global customers through a website is suitable for products that do not require demonstration or explanation by a sales representative.

Direct Sales

You can sell directly to export customers by making sales visits to territories where you have identified demand. This is a simple, cost-effective way to enter global markets, but your potential sales are limited by the time and resources you can allocate to sales visits.

Distributors

Working with distributors provides you with a local presence in your target markets and reduces your own sales and logistics requirements. Distributors buy products from you and resell them to their own customers. They offer you the benefit of established local contacts and market knowledge.

Investing in training will give distributors the product and market knowledge they need to increase sales of your product. Although working with distributors provides you with access to established markets, you have minimal control over the way distributors deal with customers or market your product.

Joint Venture

A joint venture with a local business partner also provides the benefits of local market knowledge and contact. Your company sets up a business relationship with a company in the local market. The local partner may also reduce the risk of discrimination against your company. Take legal advice before setting up the joint venture as some countries limit foreign companies to minority participation in the venture, reducing your effective control.

What are the Advantages and Disadvantages of a Small Business?

There are many pros and cons to being a small business owner, and we believe it’s important that you’re aware of them before taking the leap into self-employment. Becoming your own boss – making your own rules, having your own schedule, doing only the work you love – is an attractive possibility, and we understand that knowing all the ins and outs of small business ownership can set you up for success.

Advantages

There are several benefits to starting up a small business, so, if you’re considering leaving full-time employment, you can look forward to things like:

  • Have More Independence

Something that all self-employment individuals can enjoy is more control and independence over their careers and every single decision they make, such as holidays taken, hours worked in a day and contracts accepted.

For example, if you want to set up your own IT business, then you’re free to choose only the projects that interest you the most, instead of having to take on work you’re not passionate about. For many, this freedom and flexibility appeal more than continuing to work for an employer, especially because they won’t have to report to anyone or depend on other people’s decisions.

  • Make More Money

As you’re aware, you choose how much you get paid when you own a business, as your wages can be a lot higher than when you’re employed by someone else. You might have to take more risks, since everything falls on you, but the rewards are also bigger.

You also have ownership of all the profits, meaning there are no restrictions to how much you could be earning, and you keep all after-tax profits you make, unless you have partners or shareholders.

  • Get More Satisfaction

Another reason to set up a small business is that you can build a career that you love, using your passion, skills and interests – this also means that you get more satisfaction out of it too, since you’ll be doing what you love.

In addition, this helps you to grow professionally as well, and you’ll be more motivated to brainstorm ideas, implement decisions, invest in training and development, and more. After all, because it’s your business, you’re more likely to be eager to face the day!

  • Enjoy Tax Benefits

Business owners can also benefit from tax breaks that people in self-employment don’t have, such as being able to claim certain expenses. For instance, business owners are often able to claim things like travel costs, office equipment costs, and even utility bills.

As contractor accountants, we can help you understand which expenses can be claimed and which can’t, so speak to us and we’ll be happy to help.

  • Have an Impact on the Community

This may not be the first thing that springs to your mind when you think about setting up a business, but, for many, it’s still an important consideration to make when you’re trying to reach a decision. By virtue of being a small business owner, you can contribute to the local economy, whether by giving people jobs or by creating revenue that goes back to the community.

Having an impact on people’s lives and careers can be a driving force for many, so keep in mind that building a business can also mean building a platform to make all this happen.

  • Enjoy Equity

This is another big reason why people choose to become self-employed. By owning a business, you also have equity – or something that you own – that you can build on and even pass on to future generations. You can sell your business as well and use that money to create a new company or to retire early; it’s up to you and, in this regard, having equity also means preparing for the future.

  • Develop Your Knowledge

Being self-employed allows you to become more knowledgeable as well, and to grow your expertise in a way that you, otherwise, wouldn’t be able to. You’ll have to learn more about your industry, about how to set up a venture, about how other companies are doing, how to best promote a service or product, and so much more.

For example, you may not have sought this knowledge if you haven’t taken the leap into self-employment. So, you’ll be able to grow your career more rapidly as well.

Disadvantages

Like with any other career path, being self-employed and owning a business is not for everyone. It’s important that you consider all the things that can go wrong and everything that doesn’t make self-employment appealing to you – only then you can make a more informed decision and choose whether this is the right option for you.

So, here are some of the downsides of being a small business owner:

  • It’s Riskier Than Being Employed

There’s no denying that being your own boss has a lot of benefits but it’s also true that there’s more risk involved as well. You’re the one investing capital (or seeking a loan or investment) and making all the decisions and, no matter how well-prepared you are, it’s impossible to plan for everything.

You may find that you end up using all your savings or that you’re not saving enough money for retirement, at least not at the start. You may also have debts right off the bat that you need to pay off and you’ll have to pay your bills and living expenses too, which can quickly become costly – all of this needs to be taken into consideration before you leave everything behind!

  • There’s More Uncertainty

Owning a business also means going through more uncertainty than when you’re in full-time employment. You’re not guaranteed to find new gigs or to have your products accepted by your target market, which can lead to financial problems.

Of course, even if you’re employed, you never have one hundred per cent job security either, since things can change at any moment. So, if your dream is to build and grow your own venture, don’t let this hold you back from achieving all your goals.

As small business accountants, we’re here to help you maximize your profits and make sure that your accounts are running as smoothly as possible, meaning we can help you with your cash flow as well.

As a business owner, it’s also important that you save up for a rainy day, even if you end up not needing to use your emergency fund – hope for the best but prepare for the worst!

  • There’s More Financial Commitment

As mentioned, you may have to use your life savings to set up your business or even take on more debt than you’d like. This sort of financial commitment may leave some people uncomfortable, which may make them hesitate when it comes to taking the plunge.

Read Also: Role of Currency in International Business

Being in full-time employment doesn’t require this of you, so it’s up to you to weigh the pros and cons and decide what you’re more comfortable with – and what your dream career truly is.

  • Longer Work Hours

The dream is to work as little hours as possible and spend the rest of your time with family, friends and hobbies. However, at least at the start, this may be downright impossible. Most business owners have to work long hours to build their venture from scratch and to get it to a point where they can take a more hands-off approach, although this, of course, depends on many factors, including the type of business you want to run.

  • You May Be More Stressed

Because you have financial and time commitments, and everything hinges on your decisions, you may also feel more stressed than if you remained employed. Owning a business means you need to be motivated and determined and have the ability to push through these stressful moments without feeling demoralized.

Also, stress can arise from having to do everything, from creating products and promoting them to having to hire or fire people and deal with suppliers and late deliveries. There are many things to think – and worry – about when you’re a business owner, and this can make it harder for some to continue.

  • You May Have to Do Things You Don’t Like

This doesn’t just mean having to take on work you don’t love when you’re just starting out in order to build a reputation and grow your business – it also means making hard and difficult decisions that help steer your venture in the right direction.

Firing people can be one of these tasks – it’s probably one of the hardest things you’ll do as a business owner, so you must be ready to face challenges like this when you want to scale up and employ staff.

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Conclusion

We have seen from the information above that small companies have both pros and cons. It is only with precision and care that the government can encourage entrepreneurship by creating business-friendly policies and easy financing options. Liberal policies encourage prospective entrepreneurs to take the plunge and create value for themselves as well as society in the end.

In the long term, small businesses can produce a substantial rise in income, opportunities and the overall GDP. If the business environment is conducive and supportive to new businesses, they will not only generate more employment but also create a variety of products and services for the consumer to choose.

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megaincome

MegaIncomeStream is a global resource for Business Owners, Marketers, Bloggers, Investors, Personal Finance Experts, Entrepreneurs, Financial and Tax Pundits, available online. egaIncomeStream has attracted millions of visits since 2012 when it started publishing its resources online through their seasoned editorial team. The Megaincomestream is arguably a potential Pulitzer Prize-winning source of breaking news, videos, features, and information, as well as a highly engaged global community for updates and niche conversation. The platform has diverse visitors, ranging from, bloggers, webmasters, students and internet marketers to web designers, entrepreneur and search engine experts.