4 Reasons Why Small Business Growth Stalling Affects Everyone

2 Mins read

There’s never been a better time to start a small business. From social media marketing tools to remote offices and tech startups, you can start your own company for very little money, and make huge profits if your idea takes off.

The problem is that every small business now competes with global competitors within its sector, which is an unwanted symptom of a connected international market. This competition can see slower growth figures, and that has unwanted consequences for all of us.

growth stailing

4 Reasons Why Small Business Growth Stalling Affects Everyone – free stock by Pexels

Here are 4 reasons why small business growth affects everyone.

Reduced Employment Opportunities

Small businesses can grow at an extraordinary rate. Many startups get off the ground with a small team of two or three, but once they land a big client or retainer they must expand at an exponential rate to match demand.

This growth process is a huge impact on employment figures. Small businesses are often the first point of entry into the job markets for new graduates looking for experiences, as the salary demands of these ambitious youngsters is better aligned to the limited capital of even expanding businesses.

Stagnant growth figures among smaller businesses and startups have a negative impact on the number of employment opportunities available.

This has two serious implications. The first is that skilled young people cannot find work. And the second is that small businesses can’t keep up with the demands of their client, meaning they capitulate more often.

Slow growth is devastating on both individual and business development.

Slower National Economic Growth

Although multi-national corporations do drive the growth of the national economy, it is the small and medium business sector that is responsible for growth figures.

If these key contributors are slowing down, the whole momentum of any country’s economy will slow accordingly.

Although these seems like an economic event of little consequence for the average man, the reality is that every macroeconomic trend affects us all.

From the price of fuel to putting food on the table, economics is a delicate balance that can easily be tipped, and the result is normally financial strain on the poor and middle class.

If small businesses slow down, so will the big businesses above them.

Less Attractive Investment Landscape

Investors often gauge the viability of an investment by considering the performance of small businesses within a location or market.

It’s a simple litmus test. If small businesses are popping up everywhere, and surviving, then it means there is an opportunity at hand – because money is already flowing through the system. A lack of businesses means that investors’ money must work harder to generate profit.

If you think of someone opening a restaurant, they are far more likely to do so in a developing area with lots of foot traffic and established businesses. Nobody is going to invest in a back-alley operation.

Slower growth scares investors away, and that makes entire markets and areas seem less desirable.

Opportunities for Innovators

Of course, any fluctuation in business presents new opportunities for those willing to create inventive solutions to help boost growth in difficult times.

A perfect example of this is the development of payment and loan systems that offer business owners relief in difficult times.

The folks over at emergency loan company Cashry said, “A small loan or capital injection is often the kick start companies need to get out of a plateau, and when competitively priced, these financial products can become very successful businesses.”

Positive and Negative Impact

On the surface, slow small business growth is a worrying sign of a failing market, but if you take a positive outlook, there is hope – both as an owner, and as a product developer. Growth stalling is inevitable, the question is whether you will worry, or benefit.

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About author
Annie is a passionate writer and serial entrepreneur. She embraces ecommerce opportunities that go beyond profit, giving back to non-profits with a portion of the revenue she generates. She is significantly more productive when she has a cause that reaches beyond her pocketbook.
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