Small businesses are the lifeblood of communities. Whether it’s a deli or a print shop, a small accounting firm or an art gallery… There’s a vibe you get from a great small business. It feels like it “should be there,” like it’s somehow woven right into the fabric of the neighborhood…
And it feels that way for customers, owners, and employees alike.
This is true of all kinds of businesses, not just those with storefronts or retail products. Working at LongerDays over the last handful of years has helped me feel embedded in Downtown Muskegon – and a proud part of the resurgence the area has seen. As someone working in this part of town, I’m not only employed by a small business, but I’m also a patron of the numerous other small businesses right in the neighborhood…
Looking at just this local microcosm says a ton about how small businesses actually create economic networks. The people working here in downtown are also customers of each other’s businesses. For LongerDays, with both local and not-so-local clients, we’re even bringing in outside money and spending at places like Rootdown, Rebel Pies, Drip Drop Drink, Boomtown Market, Carmen’s Cafe… And on and on.
This “system” is at play everywhere… The little shops and companies in cities across the world form business networks and microeconomies that help sustain one another. These districts attract people (local and otherwise), and in many cases, the people working at small shops will guide customers to other places “in the network” as well!
It’s pretty clear that small businesses are helping each other… But what’s the impact on the community at large? What makes them so important?
Nuts & Bolts
Practically speaking, small businesses make up 99.9% of all American businesses, but only 47.5% of the workforce. In 2016, some 1.9 million jobs were created by American small businesses, mostly from newly formed businesses.
These companies, even if they don’t employ as many people as corporate giants or big-box chains, are responsible for a large portion of local tax revenue, which means they’re actively supporting city and county governments. One incredibly eye-opening study featured in the Strong Towns journal compared the economic impact of a mixed-use building (commercial and residential) and a single, large-scale retailer occupying a similar space. The study, in Asheville, North Carolina, yielded some staggering results:
“The city, which has a population of about 83,000, realizes an astounding 1,000 percent greater return on downtown mixed-use development projects on a per acre basis compared to when ground is broken near the city limits for a sprawling retail center.
Put a different way: a typical mixed-use acre of downtown Asheville yields $150,000 more in annual tax revenue to the local government than an acre of strip malls or big-box stores.”
Even when we are romanticizing the communal benefits of small businesses, the evidence is quite clear. In terms of tax revenue and job creation, small businesses are doing a TON to enrich communities and keep local economies moving.
Additionally, thriving small business districts help keep cities accountable for infrastructure upkeep. The presence of successful businesses helps decision-makers see the need for good roads, practical traffic direction, street lights, landscaping, and on and on!
Let’s Get Romantic
Okay… Now I do want to do some romanticizing… Local shops, eateries, breweries, etc. are AWESOME. There’s a special feeling to knowing who works there, and them knowing you (cue the Cheers theme song).
We’ve all heard the stories of Walmart opening a new store half a mile from one they just closed, just for the tax loopholes… Well, the little often guys do the opposite. Right here in Muskegon, Rad Dads used their restaurant as a hub for bicycle donations, community cookout, and family-oriented father’s day bike ride. The soon-to-be-open Rake Beer Project is organizing Thursday night hikes through some of our area’s beautiful woods and beaches…
Our downstairs neighbors, the Block and Unruly, have both been meeting places for emerging ideas and hosts to celebrations honoring leaders in the community.
And that’s just in a few blocks of our little city. This kind of stuff is happening all over the country – and all over the world! The people running many small businesses know that the local residents are their primary customers, and that contributing to the community is a great way to both earn their trust AND give back the people that support them.
For companies like ours and others outside of the retail/food/beverage space, we may not rely on tourists or local residents as customers, but that makes it all the more important to connect with area entrepreneurs and find ways to participate in community events.
As entrepreneurs become local leaders, they get to know one another, start more businesses together, form partnerships, take on roles in city government or with local agencies and coalitions… They are able to use their connections and capital to spur positive changes. They have an ear to the community and can be a voice for their wants and needs.
All of this serves to bolster a sense of identity and pride in the local culture, and that sense of pride and preservation helps keep crime rates low, makes people invested in taking care of parks and structures, and generally makes people care more!
The benefits are countless. Small businesses employ residents and connect them to their communities… They generate tax revenue and incentivize cities to maintain infrastructure… Create meeting places for people to come together in the spirit of community… Generate foot traffic and bring in outside money that is reinvested in the local economy… Help people care about where they live and feel like part of something greater…
We LOVE small businesses of all kinds, from the highly visible to the not-so-consumer-facing. They (we) are truly the backbone of your communities, and deserve our support!
Let us know some of your favorite small businesses in the comments!