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January 24, 2017

The world is getting better, Thanks to small businesses

One of my favourite read is autobiography of great people and companies around the world. As gathered, it was discovered that majority of the big corporations we see today not only start small but also start during economic recession. That gets me concerned and further researches reveal that while some of these businesses were originated in accordance with the founder plan, majority spring up as an alternative to job loss or inability to get a reasonable paid employment.

My point of discussion here is not how they were created but what are their impacts on the macro economy situation of a nation or world at large.

According to the U.S. Small Business Administration (SBA), a small business is defined as a business (corporation, Limited Liability Company or proprietorship) with 500 employees or less. Small businesses represent 99.7 percent of all employer firms. Since 1995, small businesses have generated 64 percent of new jobs, and paid 44 percent of the total United States private payroll, according to the SBA.

 From micro to small business, you can be part of the world achievement treading the part of entrepreneur. It starts with a dream, a strong vision that can never be stop.

The first impression an average citizen will like to hear about the nation economy is on job creation. Why not? If the population of people who are capable and ready to work is gainfully employed, there will be significantly reduction of crime since we all agreed that “idle hand is devil’s workshop”.

In many countries around the world just like the example of U. S. given above, small businesses are known to be the backbone of the economy most especially on job creation.

In the European Union, SMEs are seen as largely essential for European employment. Each year, one million new SMEs set up in the European Union. SMEs account for 99.8% of all companies and 65% of business turnover in the European Union.

In the UK where DMA Consulting Limited is based, the figures are again pretty similar. At the start of 1997, there were 3.7 million businesses, with 99% of these having less than 50 employees.

In Nigeria, according to a study done by the Federal Office of Statistics shows that 97% of all businesses in Nigeria employ less than 100 employees. Looking at our earlier definition of SMEs, it then means that 97% of all businesses in Nigeria are, to use the umbrella term, "small businesses". The SME sector provides, on average, 50% of Nigeria’s employment, and 50% of its industrial output.

Not only that small business creates employment, they also serve as medium of creating wealth within the country. There are many ways they make this happen. They depend in little or no way on government and instead give back to government in terms of tax and sustainability of Gross Domestic Products apart from the issue of employment opportunity created as discuss above. It is also through small businesses that government is able to generate external reserve through exportation of raw materials and occasional finished goods.

Because small businesses required low level of capital, they generate new invention and assist in developing and testing new technology within the country. Not only that small business also makes it easier for large business to function efficiently, they assist them in generating raw materials and distribution of their finish products.

It is very unfortunate that leaders of developing nations most especially Africa waste most of their time and national resources travelling around the world looking for grants, partnership and investment opportunity instead of focusing on collaborating with their able citizen to create a reliable and sustainable indigenous firm.

I always ask myself, is it that they lack such wisdom or doing it intentionally as a result of their selfish interest. It is glaring; no capitalist is interested in investing where he cannot reap bountifully. This is not even my concern, but at the end they will repatriate most of the gains from the ventures back to their country. And in most cases they dominate key position within the firm and our citizen expected turn to act as second citizen to foreigners in their country.

There is amount of contribution large corporation either foreign or indigenous can contribute to economic development of a nation that is comparable to small businesses. If government of any nation could try as much as possible to take into importance the development of small business within his territory, it will go a long way to reduce treat from other nations and the opportunity to retain and call back his best resources: human resources that is developing other nations as a result of negligence from his home country.

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