Small businesses are often
underestimated when talking of the economy, but the fact is that small
businesses actually have a huge impact on our economy providing 50% of the jobs
in the United States . In
the world of business there are many categories of businesses, non profit
organizations, green businesses, start up and high growth businesses, internet
businesses, and home based businesses just to list a small few. With the many
categories of businesses, all individual and unique in there own way why must
they compete against one another creating higher pricing for consumers and
sometimes their very own demise. Don't get me wrong, competition is
a strong way for a business to succeed however, what I am proposing is this,
why cant small businesses work together with other types of small businesses to
create an alliance and an army if you would of referrals growing their
businesses by helping one another. Keep
in mind that a small business is defined as any privately owned business that
has less than 500 employees as we take a look at the statistics; I'm more
interested in small business competition effects in small businesses like a mom
and pop shop. The United States
has approximately 23 million small businesses accounting for 54% of United States
sales and has increased 49% since 1982. Of those 23 million small businesses Utah contributes 241,692
small businesses to that number (2008). The majority of Utah 's small business owners are those that
specialize in construction, real estate, or professional/scientific/
technological services.
I came across an article with six
rules for building strong business connections, these are as follows, Join a
local meeting group for entrepreneurs, Join a social media, Join small business
web, PAY IT FORWARD, build informal alliances with like minded companies and
adopt a “support a small business” mindset. Through these six rules and other
research you can deduct that there are three main types of assistance when discussing
support for small businesses. The first type of program that helps with small
businesses are those that help with both planning and acquiring financial
assistance. Second there are support groups that help with planning and
decision making among business owners, and third and final are programs that
help make connections between business professionals as well as their
consumers.
There are several government funded
programs and privately owned programs for small businesses, most of which pertain
to helping with financing and other financial burdens that come with owning a
small business, mainly they are in place to help new business owners in the
start up process. There are several programs out there for new businesses owners;
the SBA (small business association) specializes in helping small businesses
from the beginning of creating a business plan to acquiring the right loans and
grants. The SBA is not the only company out there that is dedicated to helping
small businesses. 10,000 businesses is a program funded out
of Cleveland where a team of professionals at a community college are
teaming together to help continued education of small business owners
teaching them and mentoring them as they go. There are also several "incubation"
programs I came across (unfortunately not located in the U.S)
where a firm essentially nurtures a business until it is either successful
or a bust. This incubation program sets up business owners directly in
their building space if necessary and helps with decision making, marketing,
hiring, creating policies etc. Businesses in this program are not
released until the business is well on its way.
Business outreach programs are
small programs that are generally funded by the city, these programs are in
place to help not only guide businesses through the start up process but to
help them connect with other businesses involved in the program to keep the
business relations within the community rather than outsourcing for products or
services. Keeping relations within the community helps balance
and stabilize the economy within the community between business
owners. These “support groups” usually have a small fee that is required
in order to be a part of the group. These groups then get to meet once a month
and help each other with the functions of running a business. Questions asked
at these meeting can pertain to simple marketing issues to more complex issues
of finding suppliers. There are also many social networking sites, some
requiring membership fees and some are free. Among the many networking sites I
came across three stood out as the most popular, twitter, facebook and the
current number one business networking site, LinkedIn. Most businesses are
using these to not only communicate with one another but to communicate with
consumers which bring us to our third and final form of support for small
businesses.
The last form of support involves
programs that help business owners connect with their consumers as well as
their fellow business owners. The 3/50 project is one of these programs that
help encourage consumers to shop locally by challenging consumers to pick three
small businesses that they would miss if the business was to disappear
tomorrow, then choose one of these businesses and spend fifty dollars a month.
If half of the employed population did this, $42.6 in revenue would be
generated each year. The importance of shopping locally is how much money goes
back into the community, for every one hundred dollars spent in a local shop,
sixty eight dollars goes back into the community for taxes, wages, etc. If you
spend one hundred dollars in a national chain only forty eight dollars comes
back into the community, this is why it is important for businesses to band
together creating connections and referral programs. Locally, business alliance
programs are simply in place to help make these connections. Some businesses
have created their own ways of referral programs. Companies like Dixie Direct,
and the green pages are sources that are simply in business to combine businesses
in town into one convenient book of coupons and advertisements. They make money
off of making connections between business owners and consumers. Other simple
ways to make connections is by banding together to create discounts and rewards
for the consumers that shop or purchase services at one of the businesses. An
example of this occurring locally is at the Summit Athletic Club where they
advertise for businesses (for free) to their 6,000 members, in return the
businesses getting advertised for must provide a discount of at least 10% to Summit members, this is an incentive to
not only shop or eat at these local businesses but to become a member of Summit
for all the “perks” of a discount card. By making small connections as these
the community of small businesses in town are growing and expanding together.
Like I said in
the beginning, competition is a major part of any business but as a small
business owner it is important to remember that your connections
within the community of both fellow business owner as well as consumers help
you build strong community referrals and relations improving the quality
and success of your business.
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Business alliance
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