How Do Small Businesses Impact The Local Community?

People often say that small businesses are the backbone of a country’s economy. That’s certainly true, but not enough is said about how those businesses impact their local communities.

Small businesses impact their local communities by creating jobs and circulating money in the economy. Besides that, they also help the environment and give customers access to more product and service choices. Some iconic businesses even become part of the community’s identity, attracting visitors from far and wide.







Everyone can benefit from learning how small businesses impact their surrounding communities. This guide will explain all the ways they do. By the end of this article, you’ll even discover a few ways to support your favourite community enterprises!

What Are Ways Small Businesses Impact Their Local Communities?

Small businesses like cafes and convenience stores are more critical to their surrounding neighbourhoods than most people realise. They certainly offer much more value to people living nearby than just being a place that sells the products they need.

Let’s take a closer look at some of the more significant ways a small business impacts its local community:

1. Creates Jobs

First and foremost, we must always remember that micro, small, and medium-sized enterprises (MSMEs) are job creators.

The people who work for small businesses tend to live nearby, i.e. within the same community. Some places might even have workers who live within walking distance! That means the business helps to lower unemployment rates in their immediate areas.

Additionally, the same MSMEs also help create jobs indirectly.

Whether it’s a cafe, convenience store, or workshop, all small businesses must work with suppliers. So every time they pay for their orders, they’re indirectly helping the suppliers afford their staff members.

On a larger scale, it should come as no surprise that in Malaysia, MSMEs provide employment to 47.8% of the population.

2. Offers More Choices

MSMEs that form the local business community also provide customers access to a wide variety of products and services. That means people can shop around freely and choose options that suit their needs, budgets, and personal preferences.

In other words, these small businesses help their customers meet their needs and wants without travelling outside their local area.

Local businesses these days can grow and offer customers even more choices thanks to Dropee, an online B2B marketplace. Through Dropee, retailers will quickly discover a wide range of products their customers would love and order in bulk.

Dropee makes it incredibly easy for businesses to stock their shelves and provide customers with even more products to choose from.

3. Helps Circulate Money

As you can imagine, small businesses have very deep ties to their surrounding community. That’s especially true because these enterprises help to circulate money thoroughly throughout the local economy.

Let’s use the point about small businesses creating jobs as an example. Earlier, you read that MSMEs generate employment for people in the surrounding community. So when those employees are paid their salaries, they spend it within the community.

For example, they pay rent, dine at local cafes, and purchase groceries nearby. In turn, those businesses benefit and continue circulating that money further.

Similarly, the same enterprises often buy supplies from other small businesses nearby, and they all pay taxes.

Overall, money circulating that way will have a solid and long-lasting impact on the community and its economy.

4. Helps The Environment

Believe it or not, small businesses are also great for the environment! That’s true in many ways, including reducing carbon emissions and supporting conservation.

Firstly, remember that these enterprises are often located close to their customers. That means their customers don’t need to drive far to buy what they need.

As a result, they indirectly reduce the amount of carbon emissions that occur in their immediate area.

Besides that, small businesses often occupy spaces that already exist. For instance, plenty of trendy coffee houses, cafes, and restaurants occupy vacant homes or old shop lots.

Not only does that conserve the old building, but it also prevents the need for new development projects.

5. Adds To Community Identity

Last but certainly not least, small businesses that have been around for long enough eventually become a part of the community’s identity. In other words, the business becomes a community representative, putting it on the map for all to see.

Food businesses are perfect examples of this. Think of any state in the country, and you’ll find legendary food and beverage outlets that locals are incredibly proud of.

These places become synonymous with their communities, attracting visitors from far and wide to try their menus. In doing so, they can also evolve into unofficial tourist attractions known by all.

How Can People Support Local Businesses?

As a community member, you can put effort into supporting local businesses closest to home.

You can do that in several ways, including the following:

  • Explore: Firstly, take some time to explore the local businesses in your area. You might discover ones that you never knew existed before!
  • Try: Secondly, be adventurous and try them out. That could be as simple as having a cup of coffee at your neighbourhood cafe or buying groceries from a nearby convenience store instead of a supermarket.
  • Review: Be sure to write reviews for the businesses you go to. Those reviews go a very long way towards encouraging others to visit them as well.
  • Recommend: Word-of-mouth is a big part of how these businesses get discovered. So, tell your friends and family about your experiences with them.
  • Engage: Lastly, supporting a small local business can be as simple as liking or following its social media page. After all, social media is how many people find new food & beverage outlets to try out.

Final Thoughts

Remember that small businesses do much more for their local communities than just sell items or serve food. Whether you’re a small business owner or small business supporter, you play an important part in shaping a vibrant community! 


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