How do small businesses help the economy

Despite a challenging period for small businesses, many people are still introducing their new enterprises to the world. In recent years, of the number of new business applications has surged. In 2023, 5.5 million new business applications were filed, according to the U.S. Census. As more owners enter the market, more benefits are added to our country's economy and the economic benefits of small business grow. How do independent businesses help our economy?

How independent businesses help our economy

According to the Small Business Administration, small companies generated 12.9 million jobs over the past 25 years, accounting for 66% of employment growth in the U.S. Small businesses also contribute 44% of the U.S. gross domestic product (GDP), so as the number of new businesses grows so do their economic contributions.

1. Small businesses help support the local economy

By shopping small, people not only help up-and-coming business owners but also their local economy as well. If a person were to spend $100 at a local business, it’s estimated about 68% of that stays within their local economy. If they spent that same amount at a large business around 48% would stay within their local economy. Independent businesses provide their local economies with new jobs, products, revenue, services and more.

2. Charitable and innovative contributions

Small businesses not only contribute economic benefits to their community but also charitable and innovative ones as well. Research shows that 66% of small business owners donate to charity. Along with their charitable donations, independent businesses also produce 16 times more new patents per employee in comparison to large patenting firms, according to the Small Business Administration.

3. Lower carbon footprint

Independent businesses can provide environmental benefits in addition to economic ones. Large national chains often rely on complex, global supply chains, which account for the majority of product-related greenhouse gas emissions—over 80% for many consumer companies.¹ In contrast, small businesses are more likely to maintain local supply bases and source from nearby producers, which can shorten supply chains and reduce transportation-related emissions.² The U.S. Environmental Protection Agency notes that supply chains are increasingly global and rely heavily on transportation networks to move goods over long distances,³ and that supply chain activities represent a significant share of overall emissions.⁴.

How Elavon helps with small business growth

A small business’s ability to support the economy and make contributions to society is dependent on its ability to accept various types of customer payments. Which is why Elavon provides support for small business merchants with solutions that make payments easy and allow businesses to accept payments anywhere in-store, online, via mobile point-of-sale (POS) systems.

Elavon offers payment solutions for all businesses. From offering retail stores the ability to accept payments anywhere to serving up solutions for restaurants of all types, we serve all kinds of industries, including: Hospitality & Leisure, Government, Services and Healthcare.

Elavon delivers real competitive value for businesses. Our payment solutions are designed to help your business adapt to changing payment environments, improve cash flow and reduce costs for small business through secure payment data and mitigated risk.

Elavon proudly supports over 2 million global customers in over 36 countries, safely processing over 6.5 billion transactions every year, enabling $550 billion worth of commerce. This allows independent businesses across the country to keep benefiting our economy, our environment, and local communities.

1. McKinsey & Company, Starting at the source: Sustainability in supply chains. https://www.mckinsey.com/capabilities/sustainability/our-insights/starting-at-the-source-sustainability-in-supply-chains
2. Canello, J., Buciuni, G., & Gereffi, G. (2022). Reshoring by small firms: dual sourcing strategies and local subcontracting in value chains. Cambridge Journal of Regions, Economy and Society. https://academic.oup.com/cjres/article/15/2/237/6586027
3. U.S. Environmental Protection Agency, Why freight matters to supply chain sustainability. https://19january2017snapshot.epa.gov/smartway/why-freight-matters-supply-chain-sustainability_.html
4. U.S. Environmental Protection Agency, Supply chain greenhouse gas emissions. https://cfpub.epa.gov/si/si_public_record_Report.cfm?dirEntryId=349324