Strategies: Smallest of businesses can have a huge impact
— -- In honor of National Small Business Week from May 20 to 26, I want to salute the smallest of small businesses.
You know the ones I mean: the solo electrician, the independent marketing consultant, the two-person sandwich shop, the six-employee veterinarian office.
You may think that with a whole week devoted to celebrating small business — with politicians pounding their chests about how much they adore small business — small companies don't need me to say how great they are.
But I'm going to let you in on a dirty little secret: Almost nobody really admires the smallest of the small.
Instead, what most people now mean when they laud small companies are high-growth startups. Startups are sexy; small business is not.
Organizations, foundations, and incubators that previously might have served small companies now only want to be associated with fast-growing companies. They long to be able to take credit for helping create the next Google, Facebook or Apple.
Some people even have decided that the term "entrepreneur" can be applied only to those who can build companies that might one day be worth millions, if not billions, of dollars.
That's a bunch of baloney. (I'd use stronger language, but this is a family publication.)
Now, I, too, love high growth startups. I work with them, and I know the energy and excitement they exude.
They innovate, developing wondrous new products and necessary services. They spawn entirely new industries. They revive dying communities. Some generate hundreds, if not thousands, of jobs.
They are, indeed, vital.
But they're not the only ones that matter or create jobs. Let's look at the Census Bureau numbers and see how many people would be on unemployment lines if entrepreneurs — I'm going to use that term — didn't create their own jobs and small companies:
• 6 million employees of companies with one to four employees• 6.9 million employees of companies with five to nine employees• 8.5 million employees of companies with 10 to 19 employees• 21 million businesses with no employees
Many nonemployer companies really may not be small businesses. They may be hobby businesses or hedge-fund managers. But, being conservative — just counting nonemployer companies bringing in $25,000 to $250,000— you'd have about 6 million sole proprietors.
All told, that's more than 27 million people working for the smallest companies. Compare that to the 43,000 American employees of Apple, the most valuable company in the country.
A few weeks ago, I spoke to a group of about 500 small business owners and sole proprietors. Not one person in the room had more than 20 employees.
But they were 500 not on the unemployment lines. These were people buying software, hardware, telecom services and cars. They were fueling the economy, transforming their communities as well as their own lives.
We need more support for these small companies.
They should have better access to capital. It shouldn't be harder to get a bank loan if you need $15,000 than if you need $15 million. After all, large corporations have about the same death rate as small companies.
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