Back to list March 20, 2017 The Importance of Small Business to the Local Economy and Quality of Life Small businesses are companies with less than 500 employees. Although these organizations may not be large, they pack a powerful economic punch. These businesses account for 99.7 percent of employer firms and have generated 64 percent of new jobs since 1995, according to the U.S. Small Business Administration (SBA). Small businesses are big on economic impact, both when it comes to the local economy and quality of life. In fact, these companies help in a number of ways: They Bring Novelty and Innovation to Communities When small businesses open in a city or town, it’s good news. These companies bring new ideas, new ways of doing business and new opportunities to communities. A retail store, for example, can provide new shopping options for local residents. A restaurant can mean new food experiences. New companies also attract visitors and residents who want to sample the unique offerings. This can have a ripple effect, since visitors coming to check out a new small business may also spend their money at other local companies. Small businesses make a city economically stronger for both residents and workers, increasing the overall quality of life. To survive, small companies often need to make innovative offerings or to use creative strategies. Out of this necessity, many small businesses often end up investing in local talent or in solutions that can add innovation to the local economy. They Bolster Local Employment and Economic Growth Small businesses often hire locally. In many cases, they rely on local goodwill to survive and may not have the budget to recruit nationally or to fly in candidates from other areas. Small businesses consider employees from diverse backgrounds. By offering employment and by expanding the number of people who can have jobs, small businesses expand the number of people who have discretionary income, which means more people are able to spend locally. In addition, small businesses need support services and vendors, so they may bolster other local businesses, leading to economic growth. A new restaurant, for example, may need to buy supplies, cleaning services and foods, meaning it will contribute money to local businesses that offer these services and products. This, in turn, stimulates those businesses and the local economy as a whole. They Keep Going in Tough Times, Helping Communities Survive Economic Downturns Smaller businesses are often able to maintain a low overhead. They may also enjoy the loyalty of local patrons, which allows them to keep going even when the economy takes a downturn. This can mean small businesses continue to stimulate the economy and provide employment, sheltering a community at least somewhat from some economic issues. Cumberland Area Economic Development Corporation (CAEDC) has been helping to attract more small businesses to Cumberland County. Cumberland County offers many benefits to local companies, and CAEDC can help small companies find sites and support they need in their move to the area. Whether you’re looking for small-business loans and grants in Pennsylvania or want to know the best places or city to live in Pennsylvania, contact CAEDC today to find out how we can help.