Small Businesses and Economic Development
One of the solutions proffered to alleviate poverty conditions is encouraging and promoting skills acquisition and entrepreneurial programs. The result of encouraging such a solution is the establishment of small-scale businesses. As you might probably found out, small-scale businesses have their contributions to a nation’s economy. In fact, they are a huge determinant of a country’s economic growth.
Firstly, the primary function of small-scale businesses is that they reduce unemployment rates. Even as a one-person business owner, you will require the services of other labour- skilled or unskilled. Small businesses are also tools for capacity and skills development. They rapidly facilitate the industrial growth of any nation.
In Australia, small scale businesses constitute a larger percentage of the country’s economy and are estimated to be about 90% of the total industry. According to research, small businesses create jobs for a third of the total labour force and engage in the production of essentials, which all Australians rely on.
However, small business owners are faced with several challenges. They are mostly disturbed by:
Unstable Cash Flow
Stability and consistency are the brains behind successful businesses. Although keeping track of what comes in and goes out of a business can be an arduous task, a stable cash flow results in a stable business.
Low Funding and Productivity
Small Scale businesses or start-ups often lack huge capital to finance their businesses. Also, technologies are important tools for the possible expansion of any business but often require great funding.
In very competitive markets, small businesses usually strive and work harder to gain customers. This surely affects the profitability level and, consequently, annual turnovers.
Meeting new people; making connections can be a big plus to one’s business. This is rarely possible because small business owners are always cooped up with their daily job activities.
This is the major challenge faced by small businesses. Many small-scale business owners lose most or all of their profits to regulatory charges and, worst still, lack any form of protection from the government.
Family First recognises small businesses as family businesses. We oppose any form of extortion from the government and its agencies and promote the importance of small businesses through our policies:
- Cutting down on bureaucracy for businesses. We believe this is best for small scale businesses to encourage them to maximise their efforts to produce a greater output. People cannot effectively engage in producing goods and services when there are a lot of stringent rules and constraints.
- Government should engage in friendly taxing policies that would not scare small-scale businesses out of the market but encourage them to grow and increase employment opportunities.
- Government should engage in economic development programs that help businesses to run effectively.
- Government should provide aids in the form of loan guarantees and provides support to banks that work with small businesses with a vision of expansion.
- Government should improve on the state of infrastructural facilities in industrial areas.
- Government should liaise with academic institutions to fund research and training to build and develop the industry.