A micro business refers to a small business that functions on a small scale. It often employs fewer than 10 employees and functions as sole proprietorships. The earnings of a micro business may be less than $250,000 annually. According to research, many owners of micro-businesses have reported having started their businesses with less than $ 50, 000. This means that micro businesses require less capital to function due to their activities being lower than larger small businesses. In the U.K one of the small and micro-businesses that has had a significant impact on the economy is the Restaurant industry. Before the outbreak of the Covid 19 Pandemic in 2020, the Restaurant industry is reported to have undergone a period of steady growth. In the U.K, eating out in restaurants is a popular leisure-time activity. According to a study conducted in 2019, British households spent an average of about 19 British pounds on restaurant and café meals every week. This is without including takeaways. Although lockdown measures had severe impacts on restaurants in 2020, sales began to pick up as restaurants began to re-open to the public in July due to the government’s ‘Eat out to Help Out’ scheme which encouraged people to go back to restaurants to have their meals.
The number of restaurants in the U.K has been increasing steadily after a decline in 2019. 88,130 businesses were reported to be operating in the restaurant and eating out market(Lock, 2020, Pg. 5). This indicates that the country has experienced a period of growth reflected in the increasing number of small and micro-businesses operating in the industry. Between 2011-2016, net openings of food-led licensed premises increased. In 2019, household spending on eating out in various types of foodservice venues such as restaurants reached its’ pick. In 2018, the eating out in the market U.K was reported to be 89.5 billion British pounds which was an increase from the previous two years. A survey conducted in July 2020 indicated that consumers were comfortable returning to restaurants to have their meals. The most popular types of restaurants in the U.K are pub restaurants where traditional British ‘pub grub’ such as bangers and mash, fish and chips and Sunday roasts are sold. Other popular restaurants in the U.K offer Asian cuisines and Pizza. Restaurants are therefore types of micro and small businesses in the U.K that have got a significant impact on the economy.
The Impact of Micro and Small Businesses on the Economy
Small and micro-businesses such as local restaurants and eating out in the market are important to the local economy since they employ locals. Restaurants require dishwashers and other employees to assist in running the business. This is mostly due to the number of people that these businesses serve in a day. Based on research conducted by the National Restaurant Association, most U.K residents have worked in food service which accounts for almost 16 million individuals being employed by the restaurant industry. Many consumers are comfortable supporting small businesses such as restaurants within their localities hence supporting local economies within their areas.
Small and micro-businesses such as local restaurants are important since the supply chain helps put money in the local economy. This is through various ways such as paying rent or property taxes to utilities (Dilli et al., 2018, Pg. 295). In addition, restaurants also use local suppliers to create farm-to-table menus which result in more money flowing into the local economy. Restaurants further rely on local grocery stores for supplies and most of their employees usually spend their paychecks locally pumping money into the local economy. Supporting small and micro-businesses such as local restaurants, therefore, helps in supporting the local economy all across the supply chain.
Small businesses such as restaurants are important to the regional economy since they are a source of tourism. Many people may travel long distances to try out particular dishes in a specific restaurant. A town that has a thriving restaurant culture can be a perfect tourist destination. People who visit the restaurant from other areas may spend the night in those cities hence contributing to the regional economy of the country.
The Importance of Business Startups and Small Businesses to the Social Economy
Small businesses can be defined as businesses that are owned independently and require less amount of capital and workforce. They may sometimes require less or no machinery. These businesses function suitably on a small scale to serve a certain local community and provide profit to the owner (Dias et al., 2018, Pg. 135). Examples of small businesses include retail operations such as bakeries, grocery stores, medical stores and small manufacturing units. Business startups, on the other hand, are considered to be temporary business models where the focus is on rapid growth. The main aim of business startups is to create a product or service that when placed on the market can result in millions of dollars’ worth of profit. Small businesses are regarded as the backbone of the economy. They play a significant role in fulfilling daily life, social and business demands. Every small business is usually part of the community that it started to help people and get profit by fulfilling the demands of society in exchange for money.
Conclusion
Small businesses are important to the social economy since they assist people in getting products or services instantly. Nearest shops in residence or society are usually open and are the first option for someone to purchase daily needs such as milk sugar and other food-related stuff. Small businesses are also important to the social economy since they may be used as platforms for selling products and services. Big businesses usually attract customers for the products or services by investing in advertising. Sometimes they might use small businesses such as shops to distribute their products or services to consumers. For instance, a company such as Coca-Cola might use a local shop to distribute their product to local consumers. Lastly, small businesses and startups are important to the social economy since they offer employment opportunities for both skilled and unskilled individuals. When a person starts a small business or business startup, he or she helps society in reducing the problem of unemployment. A business startup, for instance, creates employment opportunities for several people such as carpenters, painters, plumbers, electricians etc. hence contributing to the economy both at the local, regional and national levels.
Reference
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