It’s virtually impossible to overstate the importance of SMEs. Not only do small businesses support local economies all over the country, but they also make an incredible contribution to the overall economy of the United States. From generating revenue to creating jobs, small businesses have and will continue to, play a critical role. But why are small businesses so critical to America’s economy? Well, they impact the country’s finances in a variety of ways. Here are some of them.
Boosting Employment: When you assess the importance of SMEs, it’s impossible to overlook their impact on the country’s employment. There are more than 30 million SMEs in the United States that employ approximately 99.7% of the country’s workforce. Furthermore, SMEs are responsible for creating around 60 to 80% of new jobs every year.
Generating Substantial Revenue: Small businesses also generate a huge amount of money every year. As a matter of fact, small businesses are responsible for 54% of all US sales. Furthermore, SMEs create roughly 50% of non-farming GDP, which translates into around $6 trillion each year.
Supporting Local Communities: As we mentioned, in addition to boosting the overall economy of the country, SMEs also play a significant role in the growth of the local communities they operate in. Lots of SME owners partake in local welfare organizations by sponsoring local events and donating to charitable causes. Furthermore, when consumers do business with local SMEs, they’re basically investing the money back into the local community. If a local business generates higher revenues, it will pay higher taxes. This includes local property tax. The taxed money is then invested into local schools, law enforcement, and the fire department. Thriving local SMEs can also increase the value of properties across the community, thereby improving the bottom line of homeowners while increasing the property tax generated by the local government.
Increased sales tax collection is another form of an impact small businesses have on the growth of local communities. The sales tax charged by local businesses is based on where they operate and can be the foundation for special taxation districts concentrated on special projects, such as sidewalk and lighting projects, to enhance symbolic shopping districts so they can attract more customers.
Influencing the Stock Market: As small businesses make such a large contribution to the GDP, they have a significant influence on the conditions of the stock market. When the economy of the United States is experiencing growth – something that is directly influenced by SMEs – enterprises across the country generally report higher earnings. This affects the stock market positively. Likewise, many products manufactured by indexed companies are purchased by small businesses.
Increased Competition
As we mentioned earlier, there are more than 30 million SMEs that operate in the United States. With the small business environment becoming increasingly saturated and competitive, it’s becoming tougher for new businesses to survive, and opportunities for gaining a competitive edge are getting rarer and rarer. According to statistics, only 50% of small businesses manage to survive for more than 5 years, with only 33% making it past the 10-year mark.
While business automation was considered to be an option for businesses a few years ago, now it’s become a necessity. More and more enterprises are making the transition to ERP systems in order to automate and streamline their workflows.
One ERP system that has taken the business world by storm is Intuit’s revolutionary QuickBooks Enterprise. Packed with a wide range of advanced tools and features, this accounting application has drastically transformed how small businesses manage their financial and accounting processes. Quickbooks currently serves more than 29 million small businesses in America and enjoys an 80% share in the small business accounting software market.
Let’s take a look at how QuickBooks helps small businesses to grow.
Automate and streamline
While bookkeeping remains a core aspect of running a business, it has changed drastically over the last decade or so. You’d be amazed at what you can do now that you couldn’t do a decade ago. By automating and streamlining a wide array of bookkeeping processes, QuickBooks has changed the game in more than one way.
- QuickBooks has made it easier for businesses to keep track of their sales reporting and invoicing as well as their expense billing. This frees up a lot of time that would have otherwise been spent on dealing with paper checks. With cloud-hosted QuickBooks, you can actually review and approve your electronic bill from anywhere, at any time.
- Let’s face it; small business owners have important things to do other than worrying about whether their tax forms were filled on time or whether their tax deposits were made. QuickBooks takes care of all of these things for you.
- QuickBooks’ reporting function also eliminates the need to create employee expense reports manually. QuickBooks can generate a wide range of employee and payroll reports that provide detailed information about your company’s payroll and employee expenses.
Improves collaboration
One of the primary benefits of cloud-hosted QuickBooks is that it combines all the data of your business into one easy-to-use platform, allowing you and your staff to access company data from anywhere at any time. This allows them to be more productive and efficient. With cloud-hosted QuickBooks, different members of your team can access and make changes to the same files at the same time, and the updates will be applied in real time. This allows everyone on your team to be on the same page, and this enhanced collaboration leads to better productivity which ultimately drives business growth.
Allows business owners to focus on their specialty
The most common reason why small businesses fail is that the owners try to wear a lot of hats. In other words, they try to do everything at the same time, which causes them to lose focus on what they’re actually good at. One might argue that most small business owners don’t have the resources to hire accountants and CPAs to handle the finances of the business, and that’s certainly a valid point.
However, software like QuickBooks can certainly help in this regard. By automating the financial management aspect of the business, QuickBooks frees up time for business owners to focus on other important things – such as growing their business.
Evaluate your success and achieve financial clarity
We’ve already mentioned how QuickBooks improves collaboration by consolidating enterprise-wide data. What we haven’t mentioned is how data consolidation helps with decision-making. By consolidating your enterprise’s data, Quickbooks essentially provides you with all-round visibility of your business. QuickBooks can generate a wide variety of detailed reports which provide you with complete clarity on all the financial aspects of your business, and when you have all the data and insights of the different workflows at your fingertips, you’re easily able to root out inefficiencies and bottlenecks and eliminate them. It also allows you to make informed business decisions, which inevitably leads to business growth.
Increased business mobility and agility
Cloud-hosted QuickBooks has also made it easier for budding companies to source the best talent, regardless of their physical location. It allows even small enterprises to expand their operations internationally and create a global staff based on skills and experience.
Conclusion
With the business environment as competitive as it is today, it’s not easy to grow a business. However, it’s by no means impossible. In addition to commitment, hard work, perseverance, and dedication to your vision, you also need to be prepared to take risks. Small businesses typically have limited resources, and the key to success is allocating those resources smartly and efficiently. In order to achieve a competitive advantage, you have to be quick to identify and embrace emerging industry trends and new technologies. QuickBooks has proven itself to be an excellent business accounting software that can help drive small business growth. By automating and streamlining the financial processes of your business, it allows you to focus on other core aspects of your enterprise.
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