Why Small Businesses are Crucial to Americas Economy

(437 Words)
Americans may be familiar with the many large businesses constantly in the news, however small businesses play a crucial role in the United States economy. Small businesses are typically defined as those with fewer than 500 employees, but they can also be defined by financial characteristics such as sales, profits or assets. There are many ways in which small businesses affect the economy, the market and even the lifestyle of Americans.
America’s small businesses provide many jobs, which are of vital importance to the economy. They are estimated to provide employment for more than 50% of workers in the private sector. Without these small businesses, many more Americans would be out of work, creating a great strain on the United States economy. In a recent interview, the President remarked that small businesses create two out of every three jobs in America.
Already high unemployment affects Americans every day. Those without employment have difficult providing for their families. Many face foreclosure, and scores are without health insurance. Of course, without an income they spend less, further harming the United States economy. It is vital that these small businesses continue to provide the jobs that will lower unemployment. They also provide an avenue for those who have been laid off from their positions.
Small businesses provide even more to America’s economy. With more competition, companies need to work harder to come up with innovative products and services to meet the needs of Americans. More businesses mean more ideas, and innovative products can help to stimulate the economy. Businesses strive harder when there are competitors fighting for limited demand. They can be flexible and adapt readily to change, as is needed in an unstable economy.
Small businesses can even help with the attitude of Americans, which can therefore help the economy. They can provide people with a way to be their own bosses and let their visions come true. This positive atmosphere can translate into healthy spending, which can further help the economy.
Because small businesses play such a large role in the lives of Americans as well as the economy, the government and organizations such as the Small Business Organization try to aid in their growth and survival. Small businesses can face problems such as undercapitalization, insurance costs, energy costs and taxes. The President and the Government have tried to respond to some of these issues by enacting tax cuts in areas such as insurance and equipment purchases.
Small businesses have been called the backbone of America. It is vital for them to survive and even thrive. Steps should be taken to support these ventures.
Resources:
http://www.sba.gov/administrator/7389/5786
http://usgovinfo.about.com/od/smallbusiness/a/sbadrives.htm
http://www.whitehouse.gov/blog/2010/05/13/small-businesses-backbone-americas-economy