It is evident that small businesses contribute greatly to the economy, they supply to the economy by providing new innovations. and creating jobs being responsible for more than half of Canada’s employment. They also help the economy to reach several goals such as economic growth full employment, and economic freedom. Small businesses also help the economy moneywise by all the investments and their starting of the multiplier effect. Entrepreneurship is also an opportunity for minorities immigrants. and women to be employed in order to reach the nation’s goal of full employment.
But primarily, small businesses have such a positive impact on todays Canadian economy most importantly through innovation Job creation. and business investments. Small business companies employing less than 50 people are direct results of entrepreneurship. Entrepreneurship is defined as any attempt at a new business or new venture creation.
This involves self employment and independence which leads to economic freedom thus resulting in innovation. Entrepreneurship entails being your own boss and making your own decisions, therefore, economic freedom.
They have freedom in choices and final decisions for the company whereas in large corporations rules and restrictions apply. In small companies and entrepreneurship there lies the ability to take chances risks and make mistakes. With larger companies mistakes cause more consequences and costs there are more opportunity costs for them. With small businesses, there are no restrictions rules and regulations because you are your own boss. You make your own decisions and are able to be more creative and imaginative with product ideas financing and management.
Entrepreneurship allows business owners to make ideas, which would not likely be approved in large companies. a reality whether they succeed or fail.
This is why small companies are known for their crucial roles as leaders of innovation. In 1932 a small business in Kitchener Ontario introduced Canadas first blue box program for the reuse of household paper glass and cans. This innovation of garbage programs have developed into a nation wide recycling program. The famous Timothys Coffees of the World inc also began as a risky small business. In 1975, Timothys started up before coffee became a necessity for making your way to and through work and school. The entrepreneur was taking a chance in investing in a coffee store. in hopes that consumers would find a trend over a cup of the freshest coffee possible. Currently Timothy has turned into a 150’store chain with revenues adding up to $66 million because consumers reacted positively to the innovational idea and trend of fresh coffee. On the whole small businesses and entrepreneurship represent economic freedom and innovation.
Through the ability to make final decisions choices and equal opportunities these small businesses such as recycling and Timothys. innovate new ideas products and trends for the economy. Not only do small companies help Canada achieve the economic goal of economic freedom but also improves the nation’s GDP an indicator of the well-being of the economy. Innovation creates competition in the market causing prices to decrease and consumer spending and quality of products and sen/ices to increase. Entrepreneurship increases GDP through the increase of business investment consumer spending business investment and exports of new innovative products. When entrepreneurs start businesses they create job opportunities. Not only are they making work. but they are also lowering the unemployment rate and starting a money multiplier effect. Small businesses are vital in todays Canadian economy. They create 75% of newiobs in Canada. while 97% of them have less than 50 employees. Along with medium-sized businesses both sizes add up to account for 58% of total employment in the country.
That means only a mere 25% of new Jobs are created by larger business organizations. Small businesses are constantly being started so new ones are always being created. With larger busmesses there being less opening less frequently once employment is at full swing. they wont be making drastic changes in employment unless they choose to expand their business or production With companies in 1994 to 1998 that has fewer employees already generating 9 million jobs. and thousands of females immigrated and minority entrepreneurs with less than 5 employees creating over 1 million jobs it is not obvious to see how much of an impact small businesses have on people of different ethnicity or gender: equal opportunity. People that wouldn’t normally find jobs as easily can now find one in entrepreneurship. which in turn will help the nations goal in achieving full employment. Small businesses today reflects the diversity of Canada’s population. including 37% of small businesses now being owned by women.
But more importantly. its not hard to see the huge effect small business have on unemployment rates With employment at a high rate. there Will. in turn. be a higher level in spending and consumption. which increases the circulation of money and starts a multiplier effect. That is. when there is an investment in a business who then hires and pays workers. who then go out and spend their earnings elsewhere. where their earnings now turn into earnings of another. and this pattern repeats through business to business. Job creation is a major contribution to driving the economy as it is definitely good for employment rates, opportunity and circulation of money. Small companies also contribute greatly to the business investment of the country, it is a fallacy that large companies account for most of the business spending and investment of an economy in general. Through analyzing this fallacy may seem to true through common sense, but in reality, small and medium businesses With 100 or fewer workers spend $2.2 trillion annually in the us.
This is only $400 billion less than large companies making a small business account for nearly half of the business spending and investing in us investments, being a busmess purchase of capital goods, construction of new buildings, or changes to inventories, with a view to increasing production and profit, are evident in the life cycle of a small company. In the process of creating a small business, investments must be made. Investments are put into purchasing supplies, rent, and land. They must also invest in equipment and technology to increase productivity and efficiency in hopes of higher profit margins, while the company grows and expands, the company will require more investment on supplies and capital. They may receive the funds through profits earned preVious to the growth Small companies also drive the economy through business investments and injecting into the stream of the economy through jobs and expenditures.
The money they put into their businesses adds to the money multiplier through employee wages, capital, products, and reinvestments. Small businesses are beneficial to today’s economy through several reasons. These proofs include economic freedom resulting in innovation, job creation, the money multiplier and busmess investment. Economic freedom helps small business create new innovations and create jobs for women, minorities, and immigrants. Small and medium sized businesses are responsible for 58% of total employment in Canada which helps increase consumer spending and inject into the money multiplier of Canada. The $2.2 trillion injected into the stream of the economy by small businesses also helps the productivity and money multiplier of the nation. On top of this, small businesses help the Canada to reach several economic goals such as economic freedom full employment, and economic growth. Not only do they help the nation to attain economic goals, but small companies also drive the economy through economic freedom, innovation, job creation, the money multiplier, and business investment.