Small businesses provide an important role within their communities by bringing people together and helping local economies thrive. By providing jobs for locals, encouraging economic growth, and helping diversify local marketplaces, the benefits of small businesses in a community are more than the goods and services they provide. From family-owned restaurants to local boutiques and coffee shops, many small businesses are even responsible for shaping the overall identity of the community. With the ability to personally curate the products they carry, small business owners only offer the commodities and services they know that their customers want, need, and like – providing a customized and thoughtful retail experience.
Often, local businesses are seen as the foundation for their community. Much more so than at the national level, small businesses make up the vast majority of a community’s GDP, therefore, the revenue small businesses bring in is vital to that community’s overall economic health. While it’s certainly important to acknowledge the economic contribution that a small business can make, it should also be noted that this relationship isn’t a one-way street. Both community and business thrive off of each other in a mutually beneficial way. As much as a small business can do for its community, both economically and socially, it wouldn’t be possible without the support of the people it serves.
How Small Businesses Impact Their Communities
Small businesses have a significant effect on the vitality of their community. Arguably, the best way for neighborhoods to become financially successful is to create an environment that supports and nurtures small business growth. Here are some of the many benefits of small businesses in a community:
Create local jobs. Hiring local help has a great benefit to the regional economy by creating more disposable income within the community. A city with a thriving small business environment encourages people to stay, making it economically feasible to do so. Local workers are also more likely to spend their income in town, providing a chain reaction of prosperity.
Local involvement. Small businesses typically thank their communities by giving back to local schools, charities, youth sports teams and other organizations. Local businesses pay local taxes which means more revenue goes back into the community. That additional revenue means more money for improvements to city roads, schools, and other needs.
Foster community identity. The overall makeup of the many distinct personalities of local businesses reflects their locality, creating a unique image for their community. This uniqueness is important, as it gives tourists from outside the community a reason to come to that particular area and spend money.
Benefit other businesses. As a business draws in customers to an area, neighboring businesses typically benefit, as these customers are also likely to check out and shop at other businesses while they’re there. Cultivating and encouraging entrepreneurship in these ways further develops a favorable climate for small businesses.
Offer Internships. Successful small businesses inspired others to consider starting their own small business, encouraging healthy competition and innovation within area. Even offering internships or entrepreneurships to high school or local colleges would provide students hands-on experience to learn professional skills and the ins and outs of running a successful business.
How Good Community Relations Help Your Bottom Line
It’s not hard to make the case for community involvement and philanthropy. Many small business owners are already on board by donating a substantial percentage of its profits to charity. However, even small business owners who are more focused on the bottom-line often find that community involvement provides benefits that can actually increase profits long-term.
Branding benefit: Getting involved in the local community puts your name and your brand out there. Small businesses typically can’t spend big money on advertising and marketing expenses, so getting involved is a relatively inexpensive way to let people know who you are, especially if you’re newly established. An influx of retweets, shares, and ‘likes’ have the ability to significantly amp up your social media business pages and overall costumer involvement.
Networking benefit: Events and initiatives that give back and engage the community not only present great social media opportunities, but also attract new customers and strengthen preexisting relationships. Since most customers like to buy, shop, and dine at a business that provides long-term support for a specific cause, it may be wise to choose to donate to an issue that resonates with you.
Build loyal customer base: According to a study by Cone Communications and Echo Research, 82 percent of U.S. consumers consider corporate social responsibility when deciding where to shop. Businesses that show their communities that they care and are committed to helping improve the local area create emotional loyalties with residents.
Chain reaction growth: A chain reaction of growth happens when a business and its community are both prospering. When a local business gives back to the members of its community, it’s financially empowering those people to spend more, and in turn, benefiting local businesses. You’re investing in future sales, leading to revenue growth.
When considering the benefits of small businesses in a community, and the metrics for determining success, it’s important to remember that most of these benefits require playing the long game. Fostering and nurturing client relationships take time, but if you’re willing to give and engage, the community will reward you with support and loyalty.
What You Can Do in Your Community
Sponsoring local events, hosting fundraisers, donating to charities and funding local projects (like building a new park, for example), are all great ways to get involved. Hire local help and be sure to use local vendors for your business whenever you can. Keeping money in the circulation of the local economy will financially benefit everyone within the community. Here are a few ways that small businesses can get involved:
Importance of volunteer work: Serving and helping others not only benefits others, but benefits ourselves, too. Customers want to buy into a brand, not just buy from it. As a company, it’s important to present yourself as a trusted institution that values its community and the people in it. By taking advantage of local need-based initiatives, small businesses take ownership of their civic responsibility which shows the public that they have an active interest in the well-being of their community.
Helping unite the community: By hosting benefits and events, or volunteering to a local initiative as a team, your presence will help strengthen local ties and broaden support networks. By engaging with people from different age groups, backgrounds, and social groups allows you and your team to create relationships with individuals you might not normally cross paths. This kind of engagement and diversity helps you and your employees get more value from their community.
Types of volunteering: There are plenty of ways for you and your company to create a lasting effect on your community. Consider implementing one or more of these initiatives:
- Cash or sponsorship: Some of the most common ways in which to give back are in the form of a philanthropic gift for a charitable cause. Monetary contributions can go a long way towards helping charities achieve their goals.
- Pro Bono Services: Offering services or training at no charge is a great way for people who prefer one-on-one engagement to contribute to a cause. Whether its donating time as a mentor, teaching new skills or providing free services such as a logo or website, this kind of volunteer opportunity can provide a meaningful impact within the community.
- Company events: Hosting a small gathering or benefit at your storefront or office building can provide speakers or — the perfect venue to raise awareness and collect donations for their organization. Being the host allows participants a chance to get to know what matters to you.
- Volunteer day: Choosing a volunteer day for your entire team to participate in allows for interaction and comradery. Getting involved can boost team morale and individual employee happiness and purpose.
- Company match: Perhaps you might consider a company match on employee donations made to qualifying charities in your area. A matching program can be a meaningful way to add employee participation and enthusiasm.
Always keep your community in mind when making any business decision. Whether direct or indirect, you want the effects of your decisions to be positive in the local area. Without the support of small businesses, a community can’t thrive; without the support of its community, a small business has no shot.
Leveraging small business financing to make an impact
Now you may be wondering how to acquire the working capital you need to host a company event, make a charitable donation, or hire local talent to make the biggest impact on your community. To help make it easier, we’ve put together a list of financing options that offer the most flexibility when it comes to small business financing:
- Line of credit: A line of credit is a flexible lending option that provides your company with access to capital on a need-to basis. Once your company has been approved for a set amount, you have the ability to draw from it whenever it’s necessary. This option provides you with the utmost flexibility when it comes to financing.
- Short-term loan: A short-term loan allows you the ability to secure working capital upfront and then pay it off daily, weekly, monthly, or annually depending upon the lifespan of the loan. Typically, a term loan has lower rates than other financing options, but this may vary depending upon whether you choose a short-term or long-term loan.
- Merchant cash advance: A merchant cash advance is another type of financing where the purchaser, purchases at a discount, a portion of your business’s future account receivables. Payments are based on a percentage of those future receivables.
Whether you’re looking to host a fundraising event, launch a volunteer initiative, or make a sizable donation, small business financing can help you and your team significantly make a difference. By creating local jobs, fostering community identity, and supporting the local economy, the benefits of small businesses in a community not only impact the companies themselves, but the community as a whole.
If you have any questions or would like to speak with a business advisor to meet business working capital needs, call one of our small business advisors at Rapid Finance today: (877)-252-0827.