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Small Business, Big Impact – 6 Advantages Small Businesses Have Over Big Box

By: Andrew Deen



As a small business owner, one selling point you should always have in the back of your head is this: Small businesses add variety and color to local communities. When people think about their favorite stores, restaurants, and service providers, most immediately think of the best small businesses in their area, rather than the big-box stores.

However, bigger companies are typically able to negotiate better prices from their suppliers and they’re able to provide more consistency. For that reason, many people don’t frequent small businesses as much as they could, making it even more difficult for these businesses to thrive.

Although there are certainly benefits to shopping at big-box stores for many everyday needs, supporting local enterprises is important for many different reasons. Small businesses have a hugely beneficial effect on their local communities and the economy as a whole.

Here are the main messages you need to convey to your customers:

Enhanced Community Connection

One of the most important benefits of supporting local businesses is the positive impact they can have on the community. Small businesses are connected to the community in powerful ways and they can become a point of pride for locals in many cases.

That connection to the community can lead to increased personalization. When a proprietor knows their individual customers on an individual level, it’s possible to provide a better, more personalized customer experience. For example, a baker might contact specific customers when they bake their favorite cookies and set some aside for that person to pick up later. That makes a huge difference in the customer experience.

Neighborhood businesses also give back to the community that supports them. Small businesses are often the enterprises supporting local causes, such as youth sports teams. A business might sponsor a team to get more advertising and express its owner’s commitment to the local community.

Better Quality of Goods and Services

One of the perks of shopping locally is that small vendors often have better-quality goods and services. Most “artisan” goods, for instance, are sold by small businesses that have a strong interest in providing goods of the highest quality.

Large brands, by contrast, offer consistency, but that can come at the expense of quality, especially when it comes to restaurant meals. A small business can set itself apart by emphasizing quality, in both its product or service and its customer service. This increases competition and encourages other vendors to prioritize quality.

Boosted Innovation & Entrepreneurship

The more successful small businesses there are in a community, the more likely it is that other potential entrepreneurs will get inspired to start their own ventures. Local businesses also promote innovation within the business community and get people thinking about what their neighbors actually need or want. Small businesses can take some risks that larger businesses can’t, simply because there’s less red tape and more flexibility.

Rangapriya (Priya) Kannan, the associate dean of faculty & accreditation, professor of management, and the founding director of the Entrepreneurship and Innovation Catalyzer at the University of San Diego’s Knauss School of Business, talks about how entrepreneurs can foster innovation within their small businesses:

“It is really important to create a safe space for people to share half-baked, imperfect ideas. It can help to set the tone by saying things like ‘there are no dumb ideas, I have bad ideas all the time,’ and reframing it to: ‘what are the different ways we can solve it?’ And the best way for managers to facilitate this is by modeling that behavior.”

Economic Benefits

Small businesses make up a huge part of the fabric of the economy. When a small business opens in a community, it creates jobs, helping the local unemployment rate. Businesses also pay taxes, which contribute to the good of the community.

Overall, businesses help to increase the circulation of money between neighbors, keeping that revenue local. All businesses have expenses, and a business owner is likely to frequent other enterprises in the area for their supplies and services, when possible. This helps to strengthen the local economy and increases demand for local commerce.

Increased Variety & Unique Offerings

Someone looking for one-of-a-kind gifts or custom pieces will have better luck shopping small, local businesses. These businesses often stock unique items and feature more variety than big-box stores. They also help to promote the unique culture and preferences of the community.

Unique offerings are one of the hallmarks of small businesses. Buying these unique offerings encourages vendors to keep stocking a variety of products that appeal to the local market. As a bonus, these items are frequently made by locals, further supporting the community and keeping revenue circulating among residents.

Small Businesses Promote Social Responsibility

Strong communities help to build accountability and ethics. By supporting small businesses or becoming an entrepreneur, you can help promote connectedness and social responsibility.

Sometimes, supporting local businesses can be a little more expensive, but we all need to understand the true benefits of keeping these businesses going. Neighbors supporting neighbors goes a long way toward creating strong communities to be proud of.

Published: May 25, 2023

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Andrew Deen

Andrew Deen has been a consultant for startups in almost every industry from retail to medical devices and everything in between. He implements lean methodology and is currently writing a book about scaling up business. Twitter @AndrewDeen14.

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