Importance of small business start-ups to recover the Covid affected economy

Small businesses have always been playing an important role in the economy. This form of business acts as a key factor for the development of an economy. Many countries in the world have taken small businesses very effectively to boost their economy; China, Japan, Maldives, etc are the best examples of that.

Unfortunately, most of the countries or people are still unaware about the importance of small business start-ups for their respective economies, which is preventing the economy from growing at expected speed.

Here, I have discussed about the following things;

• What is a small business?
• Importance of small business start-ups to recover the COVID affected economy

What is a small business?

The meaning or definition of a small business varies from region to region. But in a general sense, a small business can be a business of sole proprietorship, partnership, or corporation that has a small amount of investment and a very few number of workers. The amount of investment and the number of workers may vary upon the nature and place of business.

Importance of small business start-ups to recover the COVID affected economy

Since early 2020, the world economy has been suffering because of COVID pandemic. The business world has been seeing, facing, and suffering a lot of unavoidable circumstances since then.

In this COVID affected world, the downward economy has become a concern for all countries from under-developed to developing to developed. Many highly and well established businesses across the world have failed to run their operations due to the COVID. As a result, a huge number of employees have become unemployed overnight.

Besides the huge amount of losses of those businesses and employees, these things have created an imbalance in the job sector. The scope of job placement has reduced but the number of job seekers has increased. It is affecting the world economy heavily.

Read: 6 Lessons every entrepreneur should learn from COVID-19

In this situation, small business start-ups can play an important role. We must realize the importance of small business start-ups to recover the COVID affected economy.

The importance of small business start-ups for the COVID affected economy are:

• New start-up, new possibility
• Financial freedom
• Decentralization of economy
• Job opportunities
• Unemployment rate
• Social financial stability
• Government earnings

These have been described below.

New start-up, new possibility

During this ongoing COVID pandemic, many top level employees have lost their jobs; many established businessmen have lost their businesses. It was always very hard for a person to recover lost position or status. COVID has made it even more difficult.

So, small business start-ups could be the best way to go for them. They can use their past experiences of jobs or businesses in their start-ups to run it more effectively. It can help them to make their financial and social status better than ever.

Besides the personal financial improvements, It will also help to recover the overall economy. A new start-up comes with a lot of possibilities and opportunities. A small business start-up can grow big in future by the dedication and well managed leadership of an entrepreneur.

Many current business giants, like: Microsoft, Alibaba, etc started their operations on a small scale at the beginning. But now they are playing a big role in the economy of their respective countries. This example can help us to understand and realize the importance of small business for the COVID affected economy.

Read: Entrepreneurship: The way to accelerate an economy

Financial freedom

For an individual or a society or a country, financial freedom is very important. Small business start-ups can provide financial freedom to entrepreneurs.

Those who were in a job before COVID pandemic, most probably did not get the feel of financial freedom. They have taken a fixed salary as per their contract to meet personal expenses and a fixed budget for their professional activities.

But small business start-ups can change their financial status. They can use their money in better and more effective ways for the developments of their start-ups and personal life. It has a direct impact on personal satisfaction, which is very important for a human being. So, they should take business initiatives rather than running after a job.

Financial freedom and satisfaction of individuals are the must have things for the overall economic development. So, small businesses can play an important role in this current state of the economy.

Decentralization of economy

Small business start-ups always help to decentralize the economy. Decentralization is very important for the development of an economy.

A decentralized economy creates lots of opportunities for the entire economic system. It decreases pressures from the government or specific bodies. It helps them to act more effectively, which is highly required to recover the COVID affected economy.

If people come to start new businesses, it means they are taking the economy one step ahead to decentralize. It increases the importance of small business start-ups as starting a small business is very easy and risk free compared to a medium or large business.

So, in this COVID affected situation, entrepreneurs should come forward with small business start-ups to fight with the downward economy from their respective positions.

Job opportunities

Small business start-ups can create some job opportunities for the job seekers. In this imbalanced job market, small business start-ups can play a vital role in job creation.

As mentioned above, many people have lost their jobs because of the COVID pandemic, small business start-ups can be the best option for now to create job opportunities. The more entrepreneurs come to start their ventures, the more job opportunities there will be. It will help to boost the economy rapidly.

Unemployment rate

Small business start-ups always help to reduce the unemployment rate. This is probably the most effective sector of an economy to control the unemployment rate. A small business start-up not only creates job opportunities for the job seekers, it also creates many opportunities for surroundings.

An entrepreneur can secure the future of his/her entire family with the growth of a start-up. Only a few percent of people from business families come to do a job. They mostly join their family businesses or start new start-ups to take businesses to the next level.

On the other hand, a small business start-up creates many direct and indirect business opportunities for people, which can make people financially independent.

So, for a stable and long term benefit, there are no better alternatives than small business start-ups.

Social financial stability

Small business start-ups help to maintain social financial stability. When an entrepreneur comes with a start-up, it adds financial value for many parties.

A start-up gives financial stability for an entrepreneur; it gives stability for the job seekers by creating job opportunities. Besides these, a start-up also creates some valuable opportunities for many people.

So, the more entrepreneurs come with new start-ups, the social financial stability of an economy will increase. Increase of social financial stability is essential to recover the COVID affected economy.

Government earnings

A government has many expenses to run or operate a country. COVID pandemic has increased the expenses by a huge margin. So, earnings from different sources have become very important for any government.

Governments generally earn from different sectors of their respective countries by applying different types of tax, vat, surcharge, fee, etc. To earn from these sectors, it is important to have a financially sound population. In this case, the importance of small business start-ups is unbeatable. Small business start-ups can make people financially stable.

Above mentioned things described the importance of small business start-ups to recover the COVID affected economy.

People should participate from their respective positions to recover the COVID affected economy. No matter how our earlier days were, we all must learn from the past and think about our future rather than the past.

If we have lost our jobs or businesses because of the pandemic, If we have the ability to start new start-ups, then we should do that. Ability does not mean money only; It could be anything for any specific start-up. It could be your knowledge, your experiences, your thinking, etc.

Besides entrepreneurs’ personal efforts, governments also need to take some initiatives to encourage people to come with start-ups. Governments need to support their entrepreneurs by providing an entrepreneur friendly environment, so that entrepreneurs can start and run their start-ups smoothly.