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6 Benefits of Small Businesses in a Community

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6 Benefits of Small Businesses in a Community


In a world where corporate giants are constantly taking over, small businesses are a breath of fresh air. Small businesses add personality and charm to a community and give it character and vitality. Moreover, community involvement is at its finest through interaction among neighborhoods or helping out friends or total strangers alike. 

Small businesses have a significant impact on their local economies and the quality of life. Taking the small businesses out of the scene outrightly, the area loses everything that makes it unique and charming. They act as a driving force behind the joy and satisfaction of the locals. Saying that small businesses are the backbone of their local communities would not be wrong.

By the end of 2021, the number of small businesses has reached 32.5 million, making up 99.9% of the total business sector in the U.S. Small businesses are more than just an economic activity; they shape and impact the community in every sphere. This article will talk about how small businesses change the community outlook.

1. Revenue Generation and Currency Circulation in Local Community. 

Almost 44% of the entire U.S. economy is generated through small businesses. In 2014, the most recent year for which small business GDP data is available, the Nominal small business GDP was measured at $5.9 trillion. As most small businesses tend to operate locally, the revenue generated by these businesses remains in the community. 

Owners of small businesses tend to shop locally and prefer local vendors for raw materials and other stuff required for their business. They outsource services to other local businesses. For instance, local business owners would register their business locally. If they need landscaping services and anterior designing to set up a fast-food restaurant, they will get these services locally and pick a small company instead of going with a large firm. From logo to branding, uniform to tools, furniture to kitchen items, they will get everything from the areas nearby their businesses.

As small business owners eat at local restaurants, do groceries, and purchase items for day-to-day use from local retailers, it sustains other local businesses. From every $100 spent on the local small business, approximately $68 remains in the local community. The capital they generate from their businesses returns to the communities they belong to. Hence, most of the money they spend will end up circulating back into the local community. This will sustain local businesses, and encourage economic growth.

Not only do native customers patronize a local business, but certain businesses such as the hospitality industry, restaurants, local arts and crafts, etc., also attract national and international tourists and travelers. Hence more economy pours into the local community. 

2. Create Local Jobs

In addition to promoting local economic stability, small businesses also ensure that people do not have to travel too far for work. So, more people can stay in their community. According to the U.S. Census Bureau, the average one-way travel time to workspace in the United States was 27.6 minutes in 2019. Around 17% of U.S. workers have to travel to work between 30 and 59 minutes (one way), while 4% are forced to commute from 60 to119 minutes (one-way).

In the absence of local opportunities, people have to seek jobs elsewhere. Areas near high-tech firms and large corporations are expensive to live in. So, people have to travel a long distance from their homes to their workplaces. Spending most of their time traveling and working cause them to sacrifice their social life.

If these people do not have to travel far to their workplace, they can contribute to the long-term growth of their community. Despite the pandemic, from 2019 to 2021, there was a net increase of 466,607 jobs from small businesses. In addition to less traveling, local jobs increase local interaction and job satisfaction. A study reported that 56% of small business employees have higher commitment scores than large corporations, whereas only 38.7% of workers had similar scores.

3. Shaping Community Identity

Small businesses play a vital role in preserving and reflecting the town’s important history, culture, and preferences. Being a substantial presence within the local community for very long, small businesses can shape the people’s character as well. While walking down a small town, city street, or local neighborhood, you find plenty of local shops alongside one another from restaurants, coffee shops, art & crafts, boutiques, etc., giving a unique flavor that is distinct to the community. 

Local business owners know their customers directly. In small towns, it is not uncommon to see the owner of a diner greeting and conversing with the clients in a friendly tone. You see customers and owners discussing routine matters at a flower shop, people chit-chatting at grocery stores, etc. Such interactions build connections and relationships among the local population. Small businesses love to empower their youth and pass their skills to the younger generation. Moreover, these small businesses directly influence tourism in the area and act as ambassadors conveying the values and traditions of locals.

Small businesses support their local communities by donating, volunteering, and participating in local community events. On the other hand, the locals prefer locally owned businesses and help them get a sustainable income. During the hard times of the pandemic, when many small businesses were being shut down, the community tried hard to help the small businesses to hold on

Moreover, large organizations and corporations impact social stratification to a large extent. In such entities, there are people who are part of the management structure and those who aren’t. This line can lead to little or no social interaction between the two. On the other hand, all small businesses consider themselves part of the community and play their roles without any class label.

4. Innovate and Diverse the Local Marketplace

The small-business landscape is competitive, so it is vital for entrepreneurs to be innovative and different. Small Businesses can not just come down to price or quality as large organizations do; offering the same product in different qualities and price ranges. If your business model is not original enough, someone else will take advantage of that gap in the market.

For instance, you may stand out from other locally-owned restaurants by offering signature dishes unique among competitors’ menus. You can innovatively present your menu, follow a theme for your restaurant, elevate a local recipe into a restaurant’s quality dish, etc. This helps set your company apart while bringing the attention of both new customers looking for something special at local places as well as tourists who seek the specialties of the natives. 

Hence such local businesses appeal to the tourist by offering something that can not be found somewhere else. It will give your community a more distinct personality and open doors for more economic well-being. Moreover, a diverse marketplace ensures well-served and satisfied customers. Small businesses offer more personalized services, products, and customer care leading to happy customers and thriving businesses.

5. Changing Sustainability Dynamics by Participating in Local Decision Making

Small businesses shape the sustainability dynamics of the local community by participating in formal political processes and social movements. They can construct and contest discourses and have the ability to navigate urban decision-making processes. Not only do they tend to align business operations with political identities and beliefs, but they also have a socio-environmental impact on locals. 

Who would have thought that small businesses are more trustworthy than elected officials? Well, a study from Gallup shows that people trust small businesses more than they trust the president and congress, the church, banks, police, newspapers, public schools, and television news. Hence small businesses can influence voters as customers trust them. Just hanging a pastor supporting a particular candidate for election at your storefront can start making the mind of your customers in that candidate’s favor. 

Having that authority among locals, the small businesses influence the local decision making and convey the community concerns to the local chamber of commerce, and county management, or support a candidate at the elections that can act for the community interests.

6. Contributing to Local Infrastructure Development by Increasing Local Tax Base

Local businesses are an integral part of the local economy. An increase in the local economy through small businesses can boost tax income (including income tax, property tax, sales tax, employment tax, etc.) for local governments. So, if the people purchase local services and goods, it will boost the sales of small business owners, and they have to pay more taxes.

This tax money helps strengthen your city’s revenue for projects like roads, hospitals, green spaces, and schools. So, by increasing the local tax base, small businesses help develop the infrastructure of their locality.

Improved infrastructure, in turn, helps businesses grow more. Smooth and traffic-free roads help in the transportation of goods. Moreover, customers have easy accessibility, and employees have less commuting for work, etc.

Are You Helping Your Local Business?

Small businesses are the lifeblood of their communities. These small, locally-owned shops provide a sense of community and civic pride to residents. Moreover, they also have an incredible socio-economic impact on the local economy. Supporting small businesses by shopping and purchasing local goods gives a satisfying shopping experience and helps your community grow together.

Image Credit: Ketut Subiyanto; Pexels; Thank you!

Aisha Noreen

Hi, I’m Aisha Noreen. As an owner of a small business, I went
through multiple challenges which I overcame by experimenting with
different ideas. I love sharing those ideas with others who are
looking for solutions to problems concerning business registration,
marketing, personal asset protection, and business operation in a
compliant manner at MoneyAisle.com. Outside the work, people know me as a movie buff and my recommended films make the day of my friends.

Politics

Fintech Kennek raises $12.5M seed round to digitize lending

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Google eyed for $2 billion Anthropic deal after major Amazon play


London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.

According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.

The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:

“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”

The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:

“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”

The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.

The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.

Featured Image Credit: Photo from Kennek.io; Thank you!

Radek Zielinski

Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.

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Politics

Fortune 500’s race for generative AI breakthroughs

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Deanna Ritchie


As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.

Goldman Sachs’ Cautious Approach to Implementing Generative AI

In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.

According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.

One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.

To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.

Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.

Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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Politics

UK seizes web3 opportunity simplifying crypto regulations

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Deanna Ritchie


As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.

Streamlining Cryptocurrency Regulations for Innovation

To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.

The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.

Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.

The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.

Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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