Business.com aims to help business owners make informed decisions to support and grow their companies. We research and recommend products and services suitable for various business types, investing thousands of hours each year in this process.
As a business, we need to generate revenue to sustain our content. We have financial relationships with some companies we cover, earning commissions when readers purchase from our partners or share information about their needs. These relationships do not dictate our advice and recommendations. Our editorial team independently evaluates and recommends products and services based on their research and expertise. Learn more about our process and partners here.
Becoming part of the neighborhood benefits everyone.
Many consumers make a point of shopping small and supporting neighborhood businesses. But the impact of small businesses in the United States extends far beyond what they sell. We’ll explain why small businesses are so important and how they empower their communities. We’ll also share ways businesses can become more involved in the places they serve.
Small businesses do much more than generate revenue and create jobs. They’re the restaurants, shops and service providers people rely on every day, and many become an important part of the communities they call home. Here are 10 ways small businesses make a difference in their local communities and beyond.
Small businesses are a major source of jobs in communities across the country. According to the SBA Office of Advocacy, the United States has 36.2 million small businesses, which employ 62.3 million people, or 45.9 percent of private-sector workers. Small businesses also account for 43.5 percent of U.S. GDP, according to the U.S. Chamber of Commerce.
They’ve also played an important role in creating new jobs over time. Tom Sullivan, senior vice president of Small Business Policy at the U.S. Chamber of Commerce, described small businesses as America’s “economic engine.”
When people spend money at a local business, some of that money makes its way back into the community. Small businesses employ local residents and often buy products and services from other local small businesses, helping support more than one company with each purchase.
For example, a neighborhood restaurant might buy produce from a local farmers’ market, hire an accountant in the area and use a local company for printing or maintenance. Those businesses, in turn, employ local workers and make purchases of their own, allowing more of the money spent in the community to continue circulating there.
Small businesses can often experiment with new ideas and respond quickly when they see an unmet need. Without as many layers of management or lengthy approval processes, a small company may be able to test a new product, service or way of doing business faster than a larger organization. That entrepreneurial mindset can lead to innovations that benefit the communities these businesses serve. In fact, even large companies can benefit from thinking like a startup when they want to encourage innovation.
Matt Wilcox, chief banking officer at Fiserv, sees that ability to innovate as an important part of small businesses’ impact on their communities.
“Small businesses … [help] communities thrive [by] driving innovation and serving needs that otherwise would likely be unmet,” Wilcox said. “[They are] engines of growth, creators of jobs, builders of communities and the manifestation of technological advancement. Small businesses drive ideas, progress and opportunity.”
Starting a small business can give people an opportunity to create their own income, build wealth and turn their skills or ideas into something they own. For millions of women and minority entrepreneurs, that opportunity has already translated into businesses of their own. Women owned 14.2 million U.S. businesses in 2023, generating $2.8 trillion in receipts, according to the U.S. Census Bureau. The country is also home to hundreds of thousands of Black-, Hispanic- and Asian-owned employer businesses.
The benefits can spread as these businesses grow. Owners may hire employees, work with other local companies and provide products and services that meet needs within their communities. In that way, new businesses create opportunities for entrepreneurs as well as the people and businesses around them. [Related article: Successful Businesses You Didn’t Know Were Run by Women]
When small businesses earn money, hire employees and sell products or services, they also generate tax revenue. Depending on the business and location, that can include property, sales, payroll and other state and local taxes. As more businesses open and grow, they can expand the tax base that communities rely on to pay for public services.
That gives local governments more resources to put back into the community. Tax revenue helps support schools, roads, parks, emergency services and other programs residents and businesses use every day. A thriving small business community, then, doesn’t just provide places to work and shop. It can also help support the infrastructure and services that make the community a good place to live and do business.
Walk through almost any town or city, and you’ll find local businesses that help give the community its personality. A neighborhood bookstore, family-owned restaurant or independent shop may reflect local tastes, traditions and even the products or ingredients available nearby. Because these businesses are rooted in the places they serve, they can offer something that’s difficult to replicate somewhere else.
Over time, local businesses can become familiar parts of the neighborhood. Residents may get to know the owners and employees, stop in regularly and keep coming back for years. A favorite restaurant, shop or coffee spot can become a place people associate with living in the community.
“SMBs are the stores, coffee shops and restaurants that we grew up with and love,” Wilcox said. “We know the owners and people who work there, fostering a personal connection beyond mere transactions.”
For many travelers, exploring local businesses is part of experiencing a new place. Visitors may seek out an independent restaurant serving regional food, browse locally owned shops for something they can’t find at home or stay at a small hotel that feels connected to the surrounding community.
Those businesses give visitors another reason to spend time and money in the area, and the benefits can extend beyond the individual business. Someone who comes downtown for a popular restaurant, for example, might also visit nearby shops or stop for coffee while they’re there. That’s why tourism organizations often feature local businesses when promoting their destinations. Together, these businesses help give visitors an experience that’s specific to the place they’ve come to see.
Because small business owners often live and work in the communities they serve, they have plenty of opportunities to see where their support can make a difference. That might mean donating to a local charity, sponsoring a youth sports team or providing food, products or services for a community event.
Giving back is also a good way to get to know the people in your community. Charitable marketing can be as simple as supporting a local fundraiser, donating a raffle prize or volunteering at a community event. You don’t have to make a large contribution to get involved, and smaller efforts can still help the organizations you support.
Small businesses can help make their communities more sustainable by making thoughtful choices about where they buy supplies, how far products travel and how much waste they produce. Working with nearby suppliers, for example, may reduce the distance goods need to travel while also supporting other businesses in the community.
Restaurants and food businesses can take a similar approach by buying seasonal ingredients from local farms when possible. Other businesses might reduce packaging, conserve energy or find ways to reuse materials rather than throw them away. These practices can become part of a broader sustainable business model that benefits both the business and the community.
Small businesses generally need less space than large employers, which can make it easier for them to move into storefronts, office spaces and other buildings that already exist. Filling vacant commercial space can bring activity back to a neighborhood without requiring the kind of large-scale development that may accompany a major new facility.
Larger developments can require additional roads, utilities, sewer capacity or other infrastructure to support them. They may also involve tax incentives or other economic development packages designed to attract a major employer. Small businesses can often grow within a community’s existing footprint, helping put available space and infrastructure to use.
Getting involved in the community gives small business owners a chance to build relationships with the people who live and work nearby. Those connections can help residents get to know your business while giving you a better understanding of what your community needs.
“Strong community ties are essential to long-term success for small businesses,” Wilcox explained. “By investing locally, businesses can fuel economic growth, build brand loyalty, and strengthen relationships with customers and employees. Small businesses can build these connections both by engaging directly with their communities and using technology to better understand and serve local needs.”
There are plenty of ways to get involved, and they don’t have to require a major investment of time or money. Here are some meaningful ways to make your business a more active part of the local community.
Giving employees paid time off to volunteer is one way your business can support the community while making it easier for your team to get involved. Ask employees which local causes matter to them, and look for organizations whose work aligns with your company’s values. You can then commit to supporting these charities through volunteer work, financial contributions or both.
Getting employees involved can benefit your business, as well. Team members may appreciate having time to support causes they care about, while your company’s involvement can help build relationships with local organizations and residents. As a bonus, community events and charitable partnerships may also create opportunities for positive local publicity.
Consider sponsoring a charity drive, school program or other local cause that matters to your employees and community. Your business name and brand image may appear on event signs, donation materials or other publicity, giving your company some local visibility while helping support the organization.
For example, you might sponsor a local high school’s soccer or baseball team and have your business name printed on team shirts or displayed at games. The team receives funding for equipment, uniforms or other expenses, while your business becomes more familiar to the families and community members who attend. It’s a simple way to support something local while introducing your business to more people in the area.
Your experience running a business can be valuable to people who want to learn from it. Contact teachers at local schools and offer to speak with students about entrepreneurship, answering their questions about what it takes to start and run a business. You could also look for opportunities to share your knowledge with community groups, libraries or other local organizations.
What you teach doesn’t have to mirror your exact entrepreneurial path. If you run a restaurant, for example, you might show families how to prepare healthy meals on a tight budget. If your business specializes in upcycling, you could lead a workshop showing community members how to turn things they already own into something useful. Sharing practical knowledge gives people something they can use while allowing you to contribute to the community in a way that’s directly connected to what you do.
Look for opportunities to hire local students for summer internships, after-school positions or weekend work. Giving young people a chance to gain real-world experience can help them develop practical skills, learn what it’s like to work in a professional environment and explore potential career paths.
Your business can benefit, too. With training and mentorship, an intern may grow into a valuable employee who already understands your company and its customers. Even if students eventually pursue opportunities elsewhere, you’ll have helped them build skills and experience they can take into their next job or career.
Joining your local chamber of commerce can help you become more connected to the business community around you. Chambers often host networking events, workshops and other programs where you can meet fellow business owners, share ideas and build relationships that may lead to referrals or partnerships.
Membership can also give you a stronger voice in issues that affect local businesses. Chambers may advocate on behalf of their members, provide opportunities to get involved in community initiatives and offer resources such as business directories, discounts and educational programs. The more involved you are, the more opportunities you’ll have to get to know other business owners and become an active part of the local business community.
