‘Small’ is the new ‘Strong’!💪 Here’s why we should support Small Businesses

Private companies with limited employee strength and revenue as compared to a regular-sized business fall under the small business segment. In India, all manufacturing or service ventures having investments not exceeding Rs 10 crores and an annual turnover not exceeding Rs 50 crores, fall under this category. They are often family businesses. They can apply for government support and qualify for supportive tax policies.

Many big businesses had started with rather humble beginnings. Apple and Dell come to our minds in this regard; both had started in a garage, and today are worth billions! Many politicians feel that small businesses are more important to the country than large corporates. Everything starts small, so it is important to respect the small entrepreneur.

2020 was not a good year for small businesses; many have been forced to shut down because of Covid-19 and its restrictions. But a change has been noticed in the buying patterns of Indian consumers who are preferring all things local-from restaurants, independent stores to small businesses.

Problems faced by small business

Starting a small business can be rewarding, but challenges are a part of it. Some of them are discussed below:

1. Small businesses do not have adequate resources to hire an agency or post regular ads. So they struggle with an empty e-store and invisibility on the internet.
2. Many small businesses don’t have a well-organised marketing plan.
3. The Goods and Services Tax is complicated, and small businesses require large teams of people in-house for compliance. The managing of the digital system and the frequent and repeated filing of returns adds to the cost. A large number of small businessmen could not cope with this and closed down their shops.
4. Small businesses don’t have the resources that big companies have to modernise their book-keeping, making payments, etc. The lack of easy capital availability stagnates the growth of small companies.

Why should we support local and small businesses?👐🏻

There are more than 60 million small businesses in India, and millions of people rely on them for jobs. Small enterprises offer customised solutions for local issues and they are the heart of the local community. Small businesses and shops are the backbones of the Indian economy, and during the pandemic, around 40 million of them had suffered.

the small business segment in India creates 1.3 million jobs every year. It contributes to the largest share of employment in the country after agriculture.

India can quickly recover economically and socially from the effects of the pandemic by deepening support for small businesses. We have to encourage people to eat local and shop local. If we are to buy some products or services, it is best to do so in our hometown.

We discuss below some of the benefits of supporting small businesses:

Multiplier effect on the local economy📈

Supporting independent businesses can help support the local and marginalised communities that depend on them. They provide opportunities for entrepreneurs and jobs for the residents. If we buy at a neighbourhood store, that owner may hire a local helper, while some of its staff can go to a local coffee shop. So, small businesses keep the money close to home, and their success has a positive stimulus on the local economy. This money can be used for local developments.

Growing companies, some that begun on basements or garages, inspire other small entrepreneurs.

The same is true from a B2B perspective. Suppose, if a restaurant sources its ingredients locally, it will help local suppliers to thrive. A study has found that small businesses give back thrice to the community than similar large enterprises.

Personalised Customer Service🤝

Small business owners have a friendly, personal relationship with their customers. The employees of a small business can readily order a product if they don’t have it in stock, and also give more detailed answers to specific questions or queries. Since small businesses mostly grow by word-of-mouth, be prepared to be greeted by a big smile when you enter one!

Eco-friendly and Sustainable🌏

Generally, small businesses are less polluting than the big industries and are more eco-friendly. They have a smaller manufacturer-to-consumer journey, and you get more transparency in the source and ingredients of the products.

Employing local workers👨‍🔧

Small businesses employ different types of local employees and depend heavily on their workers for success. Also, they hire many people who otherwise are not employable by large corporations, thus stimulating the local economy.

Support Communities👥

A healthy mix of small businesses in a locality enables the local community to learn skills on the job. This creates a pool of next-generation entrepreneurs. So, in these tough economic times, they are the cornerstones of our community.

Small businesses are also involved in lots of charitable activities, donations, etc. Further, they partner with the local governments to improve the infrastructure in their area, like roads, parking facilities, etc.

Competition⚔️

Small businesses inject new competition into the market. A local unit might be able to produce goods at a cheap price because it doesn’t have to spend much on marketing and overheads. A start-up is more agile than a bureaucratic corporate, forcing the latter to adapt.

Drive Innovation✅

It is often in the smaller companies that new ideas are generated. There are lots of inventive minds out there, and patent seeking small companies get 10 times more patents than larger firms. Since they have to compete with larger firms, they have to constantly think of creating better products.

All the new and emerging technologies that we see today have come out of small firms.

Why are small businesses the backbone of India?

Small businesses comprise hundreds of millions of labourers and shop-keepers who keep India’s economy running. They contribute a significant amount to direct and indirect taxes and keep the financial wheel running. While many think that large companies dominate, it is the over 5.5 crore small units that drive our economy through manufacturing, trading, or services.

The year 2020 has been full of unprecedented challenges for businesses throughout India, and especially small businesses. Small businesses are important for the economic and social fabric of our society, and we all have a role in their survival.

There are many reasons why small businesses are the backbone of India:

1. Job Opportunities✉️

Small businesses create two out of every three new jobs in India. Also, studies have found that these new jobs provide a higher level of job satisfaction. This is because, in small businesses, there is a close personal relationship between the owners and the employees.

Small businesses employ nearly 12 crore people, many of them from the marginalised sections of society-minorities.

2. Economic Impact📊

Apart from employing millions, small businesses contribute to nearly half of the country’s manufacturing output and exports. This leads to the distribution of wealth and increases consumption.

Small businesses spread economic activities to every part of the country. Let us take a classic example. Previously shampoos were only available in big bottles, were costly, and mostly sold in cities. Then, a small entrepreneur hit upon the idea of making Re.1 sachets of shampoos. He manufactured them and started distributing them to the villages. There it sold like hotcakes and was a success story.

3. Industrialisation of backward and rural areas🛣

Small business importance can be felt in the development of rural India. They employ villages, and also Tier 2 and Tier 3 cities. In the tribal belt, they help to set-up factories promoting khadi, tea, etc.

How can we help small businesses?

The Indian government has set aside a budget of $ 50 billion which is 2% of its gross domestic output to help small businesses. As a consumer, we can also support small business, by following some tips given below:

1. Online Support📱

For small businesses that have become online, it is better to order from them than from a big retailer, to get your items delivered at home.

2. Order Now📲

We should buy from small businesses without waiting for discounts or sales. By purchasing immediately we would be placing much-needed funds in their hands.

3. Sign up for virtual classes💻

There may be many local fitness or art teachers in your area who are looking for work. You can enrol in one yourself, or gift a class to someone. It will be good to help someone in need.

4. Leave Reviews🏅

Good reviews online or on social media can significantly help a small business to gain more customers. So, what are you waiting for? Go, and spread the good word!

Small businesses have a big impact on the economy and society of our country. So, all citizens must support and nurture them.

Also read:

1) Best Tips for Small Business Owners
2) Is Market Research Useful for a Small Business?
3) Here's How Small Businesses Deal with Common Problems On Their Own
4) The impact of Covid-19 on Small Businesses. How bad this has been?
5) What Would be a Good Government Policy to Encourage the Growth of Small Businesses?