Small Businesses Help Build Strong Local Communities

In the corporate world, a sense of community and strengthening ties with locals sometimes takes a back seat to profits. A new survey from Sage shows that in the U.S., small businesses lead the charge in boosting local economies and giving back.

A whopping 92 percent of U.S. small business owners polled by the accounting software company said they personally donate to charities and non-profit organizations. According to the Small Business Administration, there were 27.9 million small businesses in the United States as of 2010. Translation: millions of professional services providers, medical offices, shop-, café-, and restaurant owners—to name but a few types of small firms— help out their communities.

Small Businesses Build Strong Communities

“Businesses want to do well by doing good,” Jodi Uecker, interim president at Sage North America, told Small Business Computing. While the contributions of major corporations shouldn’t be discounted, they can’t hold a candle to the power of millions of small businesses pouring their time, energy, and money into their local food banks, charities, and other organizations that help strengthen the fabric holding neighborhoods together.

And what goes around often comes around.  Being charitable and investing in local communities not only warms the heart, it’s smart business.

No matter how innovative, hard working or ambitious, most entrepreneurs will find it tough to survive without a strong local economy. Small businesses “take a leadership position” in terms of supporting local communities, Uecker said. “They do so much in their local market,” but many wish they could do more.

Sage’s survey also found that 58 percent wish they could do more to support Main Street. “What I think is interesting is that small businesses may not understand just how much they’re already doing,” observed Uecker in a company blog post. “The fact that these businesses want to do more speaks volumes of their passion and dedication to the communities they call home.”

Buy local: small business builds strong communities

Small Business Money, Time and Talent

Fifty-three percent of survey takers said they encourage their employees to volunteer. As it turns out, cutting a check isn’t the only ways small businesses give back, said Uecker.

Building strong communities is “not just about money,” she noted. Small companies and their employees can donate time and expertise. In Sage’s case—admittedly not a small business with 14,000 employees—the company donates two percent of employee time a year, which translates into five days. The company also provides software and tools to charities.

Money undoubtedly helps, but brilliant mind that can lead a youth coding boot camp or a strong arm that can wield a hammer is often more valuable. Skills are a much more valuable currency in some neighborhoods. Thinking beyond the checkbook and using your expertise to help improve your little part of the world “really completes the circle of what you need in the community,” said Uecker.

Shopping locally can also help, albeit indirectly. Citing data from Civic Economics, a research group, Uecker noted that for every $100 spent at a small business, “$68 stay in the local community, a higher amount than you would see in a larger organization.” For large retailers, that figure drops to $43.

Entrepreneurs, startups, and small companies keep the jobs engine roaring. Of the 3 million private-sector jobs created last year, small businesses created nearly 2 million of those positions.

“Small businesses are a vital part of our nation’s economy and of the local economies in which they operate,” said Uecker in a statement. “As the holiday shopping season approaches, shop at local small businesses to support your community.”

Pedro Hernandez is a contributing editor at Small Business Computing. Follow him on Twitter @ecoINSITE.

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