The aim for most governments around the world should be to encourage new business start-ups because of the benefits they bring to the country’s economy.
Small businesses are very important to most economies throughout the world. In some countries, roughly 99% of all businesses in the economy are small and medium-sized businesses. And among them, most of the businesses are micro-businesses employing less than ten people, or sole traders.
Here are the main policies that aim to make people eager to become entrepreneurs and start their own enterprises.
Employment creation. Even though small businesses do not individually employ many workers, when counted together, they hire a very large percentage of the working population, meaning that most of the country’s population actually works for small and medium-sized businesses. In most of new businesses, an entrepreneur is employing not only himself or herself, but also very often hiring other people too, such as family members and friends. If the business meets its original business objective to survive in the first year of operation, it will most likely expand in the next couple of years. And with business growth, additional jobs will be created for four business functions. Large companies, especially public-limited companies, hire thousands of highly educated and skilled workforce because they need to remain competitive not only locally but also globally. As a result, the national level of unemployment in the economy decreases.
New ideas and innovation. New businesses tend to be innovative and this creativity adds dynamism and progress to the national economy. It will make the country more competitive. These days, most of the world’s leading economies are fighting for talent. Many new business start-ups are in the technology sector or provide the IT services to other businesses, speeding the advancement of technology application onto the market.
Increased competition. The more businesses there are on the market, the greater the competition. And intensified competition results in lower prices, greater choice of products, and better quality of goods and services for the customers. Hence, the quality of daily life gets higher.
Greater choice of products. With more competition, the variety of products available on the market will also increase because the entrepreneurs who set up new businesses bring ideas for new or improved goods and services. Small businesses often provide specialist goods and services to consumers which larger businesses are less interested in supplying. This helps to create a greater consumer choice.
Cheaper products. Sometimes smaller businesses have much lower costs than larger businesses and can pass this on to the consumer through lower price.
Exports. As a result of business growth, some new companies will expand their operations to the export market. It will increase the value of country’s exports and improve international competitiveness. However, most business start-ups only offer goods and services to local or regional markets.
Increased social cohesion. As companies grow, they create new jobs and career opportunities for other citizens and set a good example for other companies to follow. The country will benefit not only from advantages of large companies, but also from lower unemployment which reduces serious social problems and crime rate.
Personal development. Starting and managing a successful business can also aid in the development of useful skills and help individuals to achieve the highest level of needs – a sense of achievement and success.
For start-up ideas, check: 80 Startup Business Ideas That Can Make You Money: 2019 Edition
