How important are small wholesale businesses for Economic Growth? They are vital due to many reasons such as: They increase per capita income and national GDP, which are major indicators of economic growth. Majority of people may not agree to this and are of the view that the large wholesale businesses and prominent manufacturing plants are actually the most important factor.
If you ponder deeply over the small wholesale business and the number of people who benefit from it, only then you will see what we see. Minus the small wholesale business from the economic setup of a country and be ready to witness the scale of joblessness rising to shocking extent.
Small businesses actually stabilize the economy of a country so they rightly win the title of a country s Economic Backbone.” Irrespective of the fact that they do not offer turnovers in millions of pound, investors all over the world trust them more as compared to the larger setups. These businesses are really flexible and easy to manage in changing economic conditions.
According to the number of people this industry can support, small wholesale businesses play a significant role in creating new jobs. One study showed that small businesses create 20% new jobs each year. Stats have shown that small businesses tend to decline less during an economic downturn; they remain robust in the most severe recession spans and are remarkably stable.
Large wholesale companies mostly deal at international scale therefore they need creditable professionals with laudable education while small wholesale businesses usually deal locally so people with low profile educational background get jobs there. Half of the working people of a country are usually part of the wholesale business sector. There aren t many prerequisites for manufacturing semi-finished goods and not so high-tech equipments. Therefore such manufacturers prefer hiring less skilled people who can do more work in less time and at low salary.
Consider the example of China; there are countless small wholesale businesses, usually called cottage industries. These Manufacturers deal at local scale; have less than 100 (not highly qualified) employees and primarily deal in semi-finished goods. Such employment opportunities create good earning for all of them and increase the overall per capita income of the country, which is a prominent indicator of economic growth. Increased income also improves the living standards and creates a good impact of the country internationally.
Though, majority of small manufacturing businesses depend on the work outsourced to them by larger manufactures but actually they make base of big businesses. These manufacture more products and help circulating more money. They come into being during the recession period; it was perhaps because there was nothing else to do specifically.
People use their savings and started a small wholesale business at community level. There are several niches, which do not require big amount for the startup. Small businesses help in mobilizing the cash and most of startups actually remain stable.