In today’s economic climate small businesses are vital to the success of the economy. They provide not only local needs but also serve the requirements of larger businesses. Being an entrepreneur and setting up your own business means developing the right skills, attitude and initiatives to make an innovative contribution.
In the UK today most businesses are small with two thirds owned or run by one person and approximately 90% employ less than 6 people. However, small businesses are an important source of employment.
There are many benefits of running a small business not only for the owner but also for the effects it has on the rest of the economy. Small businesses survive and prosper for several different reasons:
- Personal relationships: small businesses are very well placed to build personal relationships with customers, suppliers and employees. One of the main benefits of working with a small business is that you know who you are dealing with. You can put a face to the person, therefore making it more personal. Person-to-person interaction is as important as ever even with technology in building strong relationships.
- Flexibility: There is often little hierarchy or chain of command in small businesses. Larger businesses may have set ways of operating and responding to challenges that are hard to change. In contrast to this smaller businesses are often far more flexible.
- Innovation and change: Smaller firms are also in the best position when introducing and developing new ideas due to the fact that they often have no one to report to or seek approval from for new ideas.
- Low overhead costs: Small businesses have lower overhead costs due to the small scale of operation. These low costs results in lower prices for consumers. As a result smaller businesses are more appealing to both customers and suppliers.
- Niche Markets: In comparison to larger firms, smaller businesses are able to make a profit on much lower sale figures. Therefore they can sell into much smaller markets and access a more specific market.
Many people choose to set up a small business for many reasons. A small business doesn’t necessarily mean small earnings, many are extremely profitable. Their advantages of customer focus, flexibility and innovation means that they become steady enterprises that earn a significant return on investment year after year.
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