By erint
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  • Small Business + Community: Why The Two Are a Perfect Pair

Small businesses are the heart and soul of their communities. They add variety and originality to their communities in a way that makes their residents feel at home. At the same time, communities offer support that makes small business success possible and keeps the local economy growing.

In this article, we’ll review three advantages of the strong relationship between small businesses and their community counterparts.

Benefits of small business and community ties as explained in the text below.

Shared economic success

When communities and small businesses band together, they can achieve shared economic success, contributing to a thriving community culture.

In mathematical terms, this economic phenomenon is known as the “local multiplier effect,” which occurs when community members spend their money at a local business instead of a chain store or online corporation. As a result, the money recirculates through the local economy at a rate of two to four times more than money spent outside of it.

Alongside the increased wealth circulation, other shared economic benefits include:

  • Local networking and partnership opportunities. Small businesses have unique B2B opportunities within a community where they can thrive from shared services, referrals, and customer insights. For example, a gym might collaborate with a local health and wellness store. The store could offer discounts to gym members in exchange for promotion at the gym.
  • Job opportunities. Thriving small businesses reduce unemployment rates by offering more accessible jobs to local residents. Additionally, many open positions can offer better working conditions and increased employee engagement compared to positions at larger corporations due to straightforward interviews and more closely-knit local staff.
  • Economic resilience. A large mix of small businesses can help communities mitigate unexpected economic downturns. And, in times of economic crisis, small businesses can team up to support the community by leading fundraising or disaster relief initiatives to care for their customers directly.
  • Increased tourism rates. Unique small businesses can play a pivotal role in making a small town stand out. For example, small businesses in the artisan or hospitality sector can enrich communities with diversity and charm, making them more attractive to tourists and residents. As a result, these stores or businesses become household names or must-see stops for out-of-town individuals or families.

The connections between communities and small businesses are crucial in enhancing the local economy. It’s estimated that if a person were to spend $100 at a local business, about 68% of that would stay within their local economy. In comparison, if they spent that same amount at a large business, around 48% would remain within their local economy. By supporting the local economy, small businesses bring in more revenue, services, jobs, products, and tourists.

Aligned values and culture

A recent survey response found that almost 100% of residents believe small businesses go above and beyond to serve their communities. This results from the deep roots a small business can have among its loyal customer base. For instance, a local restaurant owner may know their neighbors’ lunch orders by heart.

This is a small example of how aligned culture and values can add more positive customer-business engagement. Other goals communities and businesses can work together to achieve include:

  • Boost environmental sustainability. Environmental conservation, waste management, and sustainable sourcing are all practical, eco-friendly mutual goals to work toward. For example, Sneakers4Good says you can reuse running shoes to support a circular economy. To get started, all you need to do is collect gently worn, new and used sneakers from your community and ship them to a shoe recycling provider to give your old kicks a new life.
  • Support charitable causes. Businesses aligned with your community values are more likely to support the charitable causes that matter to residents. For instance, a running retailer may host a run club to prepare for an annual animal shelter fundraising marathon. Or, local bakeries and restaurants may offer in-kind donations to your community’s food pantry.
  • Enhance local education. Small businesses can play a pivotal role in supporting local schools. For example, Double the Donation’s school fundraising ideas list suggests using business sponsorships to boost school funding. In addition to offering monetary support, small businesses may sponsor in-kind donations to students, like gym equipment, art supplies, or music lessons.
  • Increase community health and wellness. Together, small businesses and communities can strive to make their homes a happier and healthier place to live. This could include offering collaborative wellness programs, planning organic farmer’s markets, or hosting community sports opportunities.

When small business and community culture are aligned, the two groups can accomplish meaningful goals that benefit everyone. To ensure all members are on the same page, consider hosting a meeting between small business owners and local government officials to nail down which objectives you’d like to accomplish collectively.

Cultural and social enrichment

The symbiotic relationship between small businesses and their communities can significantly contribute to cultural and social enrichment. This adds to a vibrant quality of life that retains current residents and attracts future ones due to strong social ties and unique community characteristics. Here are a few ways these cultural benefits come to life:

  • Community events and festivals. Small businesses such as caterers and entertainers often play a crucial role in planning and executing events and festivals. These could include fundraisers, festivals, holiday celebrations, and concerts, all contributing to a community’s identity and shared sense of belonging.
  • Shared community spaces. Bookstores, gyms, theaters, and local markets are all examples of shared spaces where people gather, share ideas, and build relationships. These community hubs bring in business and add to a strong community culture.
  • Community beautification efforts. Small businesses can enhance an area’s visual appeal by sponsoring clean-up events, adding appealing storefronts, putting up seasonal decorations, or simply donating resources to beautification efforts. Thus, by keeping their area and the surrounding locations clean and well-maintained, businesses can foster a stronger sense of pride in the local community.
  • Civic engagement opportunities. Did you know that a little over a third (37%) of small businesses have actively supported local healthcare, education, and resettlement initiatives? This interplay adds to community development and improvement progress across several initiatives, from public safety to community planning, education, and more.

Small businesses help construct and maintain a community’s cultural identity. This gives communities with thriving small businesses a distinctive flair that invites members to be more socially engaged and inclusive.

Small businesses and communities need each other to succeed. Together, they can develop a unique social and cultural identity while experiencing economic advancements. Over time, these shared benefits lead to long-term sustainability and mutual growth that can outlast unexpected economic trends and create shared value.

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