Peter Drucker once said, “Whenever you see a successful business, someone once made a courageous decision.” Those words could not ring more true. When an entrepreneur makes the decision to start a business, he is definitely taking a risk. His new business could be a great success, or it could be a great failure. The only hope he has of succeeding in his business is to simply try. There are a variety of resources needed to run new and small businesses, and those resources can be found in investors. However, investors are also taking a risk. Why should they invest their money in a company that may or may not prove to be profitable to them?
Small businesses are absolutely essential to the economy’s success. They fulfill other larger company’s needs’ by providing them with services such as photography, routine maintenance and catering. In addition, small businesses owners also provide jobs to members of their community. Imagine a small town where many people were unemployed and desperately needed jobs. Now, imagine that someone within that town chooses to open a restaurant but needs employees. As a result, the people who were once unemployed now have jobs, and their local economy is on its pathway to recovery. Instances like these are exactly how small business owners continue to enrich their local economies every day. Investment initiatives like the CAPCO Program and others can help small businesses get off the ground.
As well as creating jobs, entrepreneurs are constantly inspiring others to open businesses through their creativity. For instance, Alexander Graham Bell invented the telephone. In society today, it would be unthinkable to live without telephones. There are a variety of telephone companies. Workers in other industries are able to conduct business more efficiently due to telephones. If Bell had not invented the telephone, there would be none of these companies or advantages today. There are a myriad of other industries that would not exist today without the help of entrepreneurs and small business owners creating new inventions and products.
One large investment firm that helps new businesses start is Venture Capital. Venture Capital tends to focus on new businesses with a high growth potential, and take greater risks with the possibility of even greater returns. Venture capital is a type of equity financing that finances the needs of companies that cannot seek investments from banks or public markets due to size, assets, and stage of development.
So, what are the benefits of investing in small businesses? Small businesses provide jobs to countless numbers of people. They create new ideas and products that then inspire other entrepreneurs to start businesses, thus providing even more jobs. Without small businesses, the economy would not sustain.