Why Are Small Companies Important to Our Economy? global history essay help Python Programming

Small companies are very important to our economy as they employ large number of employees in our economy and they are flexible and generally locally operated which means exchange of money stays in the community and they pay sales tax, business tax and wages which are spend locally. You take an example of locally owned restaurant business (Restaurants can also be considered as small companies) where restaurant purchases raw material from a grocery store or from a farmer locally and hires somebody local to serve/cook which creates job locally and most of the clientele are local as well.

Many of the high tech companies are small companies where they come up with very innovative products which help the mankind. Some small companies in Silicon Valley succeeded in developing very high tech products with limited manpower and funding because they had limited manpower to manage. Small companies have lesser overhead as compare to larger companies so if managed well they can generate more jobs and revenue with less investment. Small companies help larger companies as they purchase machinery, equipment like trucks, fax, and phones produced by larger companies which creates jobs.

Small companies hire people locally which generates employment as compare to larger companies where they procure globally as to cut their costs which does not generate much employment for the local communities. Smaller companies are flexible when it comes to qualification and experience when they hire people as compare to larger companies which help people with less qualification to get in the job market and acquire experience and small companies do provide better experience as employees have to wear different hats to do their job in small companies.

Small companies face problems like finance as it is difficult for small company to convince a bank or investors to provide loans or invest in the company as they are not famous and branded company. Small companies also faces problems in hiring manpower as people prefer to work for a reputed branded company which offer better salary and stability. It is even more difficult for small companies to hires skilled manpower or managerial manpower as educated people prefer to work for a established large branded known companies.

Marketing the products nationally or internationally is a very expensive and that’s where small companies have roblem in promoting their products whereas larger companies have power and resources in marketing their products nationally or internationally. Small companies also face problems in procuring as quantity they consume is not very large so they end up paying more as compare to larger companies where larger companies enjoy volume discount. Acquiring latest technology is a problem as they cost a lot as small companies operate with limited funds and they suffer the most during recession as they do not have as much buffer as the larger companies and no way of getting any bailout package from the government as automobile companies always gets it.