Small businesses are the beating heart of their communities. When we sum up their value we focus on economic impacts or employment statistics, as these are much easier to measure and track. But this misses the incredible broader value and pivotal role these businesses play in solving community issues.
With more targeted support and partnership between small business, local government and big business, there is an opportunity to drive more social impact at a low cost, which is vital at a time when district and county councils continue to face budget challenges.
Take jobs. Small businesses don’t just create jobs; they unconsciously create social cohesion. Whether it’s the long-term unemployed, ex-offenders, refugees, economic migrants or those suffering with mental health, local businesses are hiring diverse talent within communities and fostering inclusive work environments, in a way that bigger businesses can rarely match.
And through their role as employers, small businesses play a key role in developing wider skills and talent. The Small Business Community Impact Report found 78% of small businesses create training opportunities for their staff, with 28.6% creating training opportunities for the wider community as well. Just imagine if we extended this!
For instance, Brighton’s Pet Shed runs a training programme in customer service. Through this it provides work experience to a group of young adults with learning difficulties. The transferable skills they pick up set them in good stead for other opportunities, and in some cases has led to paid employment.
A more formal partnership between councils and businesses like the Pet Shed, that offers those who may rely on long-term care or benefits the chance to learn new skills and work, would no doubt ease pressure on public care services.
Over three-quarters of small businesses actively support other local organisations. The same small business owners – faced with challenges from managing cash flow, to staffing – are also the ones stepping forward to give young people a break; or turning up to volunteer at the local hospital, school or foodbank; or mentoring other businesses.
In our research we found that it just takes one or two key individuals in a community to drive strong small business connections and community outcomes. Understanding this offers the prospect of creating and stimulating more sparks to deliver low cost impactful outcomes.
We see this even in the tiniest communities, where small businesses are regenerating whole areas. The Drimnin Estate near the Isle of Mull, in 2002 provided just two full-time jobs for its remote and ageing full-time residents. Having opened further properties and businesses within its 7000 acres, Derek Lewis who has since taken over the estate, has created an additional four full-time jobs and further work opportunities within its distillery. The number of full-time residents has now reached 30 and while that remains tiny, Derek has seen younger families come to live on the estate.
In rural areas, 19% of small businesses work with local government, decreasing to 15% in villages, just over 14% in small and large towns, 13% in cities and a mere nine per cent in the biggest metropoles. Why are these figures so low when it should be such a natural combination?
The partnership between small business, the community and local government can improve lives. Just look at Frome, Somerset. Shortly after the financial crisis – when two-thirds of one of the city’s largest employers, Butler and Tanner, were made redundant – A Vision For Frome 2008-2028 was launched as a strategic partnership by the local district council and local business and community leaders.
A decade on, Frome is thriving as one of the UK’s best places to live. This is not just because of its vibrant arts and food scene, but in terms of the welfare of its community. The Compassionate Frome project, set-up in 2013 to combat loneliness in the town, has led to A&E admissions reducing by 17%. These figures are not replicated anywhere else in the country, and Compassionate Frome is seen as a trailblazer for what communities could aspire to be.
Small businesses act as an agent to change communities, often unconsciously, and create significant social value. There is a massive opportunity to drive this social impact further by embracing the collective in influence they have. Rather than turning to traditional routes of welfare, NHS, social care or developing large-scale programmes, both government and other institutions can and should turn to the small business sector to play a role.
However, to scale this effectively, we need to reward and recognise this behavior to a much greater degree. The Government should start with a new Community Impact Allowance to reward the small businesses helping their communities, particularly those creating opportunities for people furthest from the labour market.
Michelle Ovens is founder of peak b – which recently launched the first Small Business Community Impact Report