The Positive Effects of SMBs on their Communities

While it’s easy to see mega-corporations as advantageous regarding product quality and service effectiveness, many argue that it diminishes human contact in a B2C environment. As a counterpoint, many people advocate more emphasis on SMBs and their positive communities.

Small and local businesses are the backbone of human society for millennials. This fact is quite easy to forget in the era of multi-billion-dollar corporations.

So, to reinforce this idea and further prove their positive effect on their local communities, here are four important areas to focus on.

Local education

SMBs are more concerned with the local population’s education for altruistic and selfish reasons. First, children of entrepreneurs and managers are a part of the local education system. The same goes for the children of the employees of this enterprise.

Second, unless we’re talking about a huge metropolitan area with a massive migration, an SMB mostly relies on the local workforce. This is why, if they need talent, they need to train it locally. From this perspective, an investment in education might be an investment in the future of your workforce.

An SMB could even try to be proactive and learn how to create an outreach program. This way, they could spark a chance for early engagement and groom future experts. Through a string of carefully thought-out programs and scholarships, an SMB could create a self-sustaining system.

Sponsorships of workshops and even local educational institutions are common among SMBs, and for a good reason.

Local economy

The most obvious answer to why SMBs strengthen the local economy is that they create jobs. Jobs ensure wages for the local community, which buys at local stores, goes to the local cinema and pays local taxes.

Money spent at a local business is more likely to circulate locally. A part of the money will go to the state and municipality taxes, while the rest will be distributed to the local workers (through wages). Even the entrepreneur, who gets the lion’s share of the profit, is likelier to spend at least a part of the money locally.

Even Henry Ford acknowledged that to sell his cars, he had to ensure that his employees could afford them. Well, this principle is true for the local economy, as well.

The thing is that local businesses are even more incentivized to keep the local economy strong. If their wages and job opportunities are not good enough, the most promising talent will relocate for a healthier job market. Motivation is everything, and SMBs have an extra reason to be invested in the local economy.

The environment

The biggest problem with how major corporations act is that they have no practical reason to act ethically without government oversight. What do we mean by that?

Why does an entrepreneur from half a world away care if the local creek gets polluted? Out of empathy for the local people that they’ll never meet? Such a scenario is highly unlikely. A more likely answer to this question is – that they won’t! In other words, they’ll do anything that they can get away with.

The key component of business ethics relies on the fact that a business is a part of the local community and not a profit-making entity that just exists in a vacuum. Polluting the local creek your children play in is a much higher motivator, even without government regulation.

Because of this, local businesses are more likely to start initiatives to clean up the local landscape, plant trees, and organize major ecological actions. They’re also more likely to fund local ecological movements and take matters into their own hands.

Because they all exist on the same grid, local businesses are more likely to be interested in renewable energy sources. For a small business, relocating overseas for cheap labor is usually not an option. So, they need to look for long-term solutions.

In other words, they don’t have to fear whether they’ll still be here in eight years until these new solar panels pay themselves off.

Lastly, locally-produced goods don’t have to be transported as far to get to the consumer. Since transportation is a massive source of pollution, this makes a massive difference in the eco-friendliness of this business practice.

Innovation and diversity

Once again, SMBs are invested in the local community. This incentivizes them to make diverse hires for more than just an appearance. Hiring a certain demographic group member gives them a foothold in that community. It strongly resounds with this demographical population and boosts your WOM.

The thing is that a local business has a smaller margin of error. They are a microcosm of the society that they live in, and their roster should mirror this idea. The idea is that the local community ties people more closely to their background and sexual orientation than any other marker. A person from half a world away should never feel closer to you than your neighbor, regardless if they look like you or share your political belief.

The accent is always on great customer service. You exist to accommodate your customers, which is a hill to die on. Any form of innovation that will help you get it is helpful, but to get this insight, you need the representatives of various groups.

You can even help improve (or establish community identity) when done right. We don’t mean to imply that buying at your business is what makes people belong to the local community. However, it could be one of the strong bonding points. In fact, you can construct a perfect brand identity and a great local identity simultaneously.

Wrap up

Ultimately, the local community is an important link in the chain that makes our society. While convenience and profit may sometimes seem more dominant, it’s never as simple. Local businesses and those running them are more invested in the local community. They’re a part of these local communities, and their businesses depend on them. From here, they draw resources and talent, and it’s here that they get most (if not all) of their support. The link between a local community is strong and impossible to break.