Why it is important to support small business

Updated: Sep 15, 2020

In the past months, the global economy has suffered various attacks, with a severe impact on small businesses. In this article we will describe how this unprecedented situation highlights the need for collaboration and contribution to the business environment.

The times we live in are uncertain and we are all socially distanced, which means that our money does not flow as before into local coffee shops, gyms, and bookstores.

Moreover, the measures taken to slow the spread of the global COVID-19 pandemic can have a devastating impact on small businesses, including independent business owners, as well as some wholesale distributors, especially those in the early stages of their entrepreneurial careers. Many have been forced to close their doors and some may not reopen.

The Impact of Small Businesses

Small and medium-sized enterprises are of particular importance to the national economy, as they represent an excellent means to promote economic development and a better distribution of wealth.

Any business is based on good cash flow. And the fact that many activities are stalled because everyone is waiting to see how the economy evolves, means that money no longer flows as freely in the economy. If you have no income, you have no way to produce and if you don't produce, it is difficult to sustain employees. And then, employees will put pressure on the company and, in the long run, on the state.

From the perspective of job creation, we might think that large companies, due to their size and capacity, would have a better chance of creating jobs, but this is not the case.

Despite the small size of each separate unit, new data compiled by the International Labour Organization show that, when taken together, the activity of micro and small enterprises, added to that of the self-employed, reaches a staggering rate of growth of 70% of world employment. On the other hand, companies with less than 100 employees generate more than 50% of new jobs worldwide.

Although it will not be easy to get over this period, it is a time when we have to understand that it's very difficult to survive alone. These times are about capitalizing on the assets we can rely on and about mobilizing a large enough number of businesses and people to pull in the same direction.

It will be through creativity, information, education and financial support that these types of companies will be able to develop and progress, and together with them, the whole economy.

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