MicroBusinesses Are Vital to Future
April 1, 2009 by Jean Murray
Filed under Business
The very small business – with fewer than 5 employees and initial capital of $35,000 or less – is the heart of business in the U.S. and the world and it is the future of free enterprise and entrepreneurship. Often referred to as a microenterprise or microbusiness, the very small business is tremendously important to the prosperity and growth of any nation. Here is why very small businesses matter:
All Businesses Start as MicroBusinesses. Hewlett-Packard started in a garage in Palo Alto, California in 1939. Microsoft was basically a two-man start-up with Bill Gates and Paul Allen. You get the picture. McDonald’s was a little hamburger place in California when it was discovered by Ray Kroc. Any big company you see today probably started as a Very Small Business.
MicroBusinesses Employ People. Microbusinesses represent 87% of U.S. businesses. This alone doesn’t mean much, until you see that:
- One out of every six U.S. private sector employees works for a microenterprise,
- More than 4.5 million new jobs were created in the US by microenterprises between 2000 and 2005,
- On average, microenterprises are responsible for 900,000 new jobs created per year.
- In 2002 when the US saw record high unemployment of 5.8%, microenterprises created close to 1 million new jobs.
MicroEnterprises are Necessary for Future Economic Growth. With even higher unemployment today and little prospect for regaining those jobs, many people will be turning to the creation of a Very Small Business as a way to make a living and provide a better way of life for themselves, their families, and their employees. Baby Boomers in particular, who have been the victim of downsizing, have little prospect for new careers except as business owners. For us, it’s either find a way to own your own VSB or sign on as a WalMart greeter.
As you can see, whatever you call them – MicroBusiness, MicroEnterprise, or VSB – these businesses are an important factor in the success of business enterprise in the U.S. and ultimately the world.
The statistics on MicroBusinesses are from the Association for Enterprise Opportunity.
Image source: sxc.hu
