Small businesses are the driver of the economy

On a trip to Atlanta to host a public event for my writers’ circle, walking around the city revealed what might otherwise be missed between the airport, hotels and various landmarks. Atlanta is a global city with a rich local history. It is impossible not to cry in the Martin Luther King Historical Park, not to wonder how a man who has seen and suffered such hatred can still believe in love. Between that, botanical gardens, aquariums and other delights, the weekend can pass comfortably without walking the streets. But only during a more casual walk can you peek into the soul of the city and what makes it unique. For many, it’s not just Atlanta’s powerful civil rights history, but also its entrepreneurial spirit, especially small businesses.

In an alley lined with shops mostly owned by minorities, there is a small shop selling body butters and creams. As I try out the sweet hand cream, I learn her business mantra from the owner, a black woman. “I’m not a big chain, I don’t need a large number of customers, just a dedicated few,” she says. “I will do everything for them and let the rest go.” “That’s how I think about friendships,” I laugh. She told how her shop, bought with a low-interest bank loan, enabled her to get out of the circle of intergenerational poverty, how it helped her son to have opportunities that she did not have. Growing up in the inner city, she and her sisters couldn’t afford fancy creams. “I say, it will be my business!” She shows me a special tea tree and mint foot cream she made for one regular customer, and rose and almond milk bath gels for another. “Do you have a favorite scent, girl?” she asked. “Geranium and vetiver,” I answer, immediately regretting not choosing the more readily available ones. “And strawberry, lavender,” I quickly add. She gives me a meaningful smile and tells me to come back the next day.

As a child I was walking by the Dhakuria Lake in Kolkata with my grandfather, and I saw a woman selling chappals, another homemade fried snack, another painted wooden toy. There were many small shops along the way: a sweet shop, a flower shop, a “masala mashi” with her freshly ground spices, a “blouse lady” who made perfect combinations for sarees. Yet when we think of business and entrepreneurship, we often picture smart men in suits securing venture capital and closing deals, or even a serious geek with a file full of papers, rather than a poor woman who never went to school selling handmade toys and trinkets from improvised shops.

Many small businesses struggle with access to capital, networks and scale after the start-up phase. They need help with legal, financial, operational, accounting, marketing and, increasingly, e-commerce needs. But these challenges can be especially difficult for poor women. Some time ago I moderated a panel discussion on women in finance at my university’s business school. The panelists, highly successful women who have worked in the C-suite in corporate America and in investment banks, discussed the challenges women face in business and traditionally male-dominated fields such as finance. One of my questions to the panel was about small businesses. If even these women faced challenges, what about poorer women, let alone those working in the informal sector, creating jobs, reducing social inequalities and serving critical community needs while receiving little systemic support?

An inclusive economy and a fairer financial system must better support their needs. While some of this support comes from the government, such as tax credits or relief funds paid to US small businesses during Covid-19, there are many other innovative solutions that rely on public-private partnerships and transdisciplinary educational initiatives. For example, the university’s Center for Finance, Law and Policy with which I am affiliated engages business and policy students to provide technical, legal and accounting assistance to neighborhood entrepreneurs. An innovative model, it could be replicated in many settings.

When I stop by a beauty shop in Atlanta the next day, on my way to the airport, the owner has a jar of whipped body butter and a big smile. She uncorked the top; the warm woodiness of vetiver mixed with the floral scent of geranium is to die for. Delighted, I buy it along with two large bottles of strawberry lavender lotion. “But I don’t live here, I can’t be a loyal customer,” I complain. “Oh, you can and you will. See you next time you’re here.” She is right. That woman knows smells and knows people. And her business continues to thrive.

END OF THE ARTICLE