“Oh, just a small business.” I am sure you have heard that expression. Perhaps you have said it yourself! Believe me, there is no such thing as “just a small business”. Small businesses aren’t small, they’re great. They have made America great. If you work for one you are lucky and if you own or manage one you are the living the American dream.
I’ll confess. I am guilty of having said it too. After having started my first company I would respond to the question, “What do you do?”, with the reply, “Oh, I just run a small business.” Nothing was small about that business to me, the people that worked for me, the suppliers we bought from or the customers we sold to. That small business was financed by securing everything I owned, it had a payroll that grew to where over two hundred employees and their families depended on it, it provided jobs for hundreds of others from whom we bought from and it satisfied the needs of customers throughout the country. And I once said it was, “just a small business.”
Any economist will tell you that small business is the backbone of our nation’s economy. Small businesses provide over fifty percent of all private sector jobs, create over half of all industrial innovations and inventions and account for nearly half of the nation’s Gross National Product. In the decade of the eighties, small business has generated all of the net new jobs that have fueled our economic recovery.
What is a small business ? Congress has defined a small business as one that is independently owned and operated and not dominant in its field. The Small Business Administration further defines businesses as small based on industry standards that can include companies with up to 1500 employees and seventeen million in sales.
Practically speaking, those businesses that range from the smallest up to approximately twenty-five million in sales have a great number of similarities that differentiate them from larger businesses. Their ownership structures, their operating environments, their financing needs and the problems and opportunities they face have much in common. These are the businesses that are referred to as the small and closely held businesses in most literature.
Don’t let that word small connote insignificance. Every business that employs somebody and provides a service is important. Very important if you ask that somebody who is employed or the people that rely on that service.
Perhaps in referring to this group of businesses as small business we have created a misnomer. Why not call these businesses the nations most productive businesses and rename the SBA the Productive Business Administration. PBA, I like the sound of that.
For the men and women who own and operate our nations small businesses, its not easy work. Small business did not become the backbone of the worlds strongest economy with magic formulas and shortcuts. It takes hard work, careful planning, considerable thought and lots of sweat. The small business owner bears broad responsibilities and most frequently has little management support to call on when important decisions need to be made.
Since starting my first business, I have founded two others. One has been sold to a larger public company. Another has become a public company itself. And the last remains a small but important service company. Many lessons have been learned along the way.
“It’s Your Business” is a regular column dedicated to advice and analysis for small business. It will draw upon the experiences of others to support the efforts of those people that operate the small businesses that form the backbone of our country. And remember, there is no such thing as “just a small business”!