Why Small Businesses are Important

This is National Small Business Week and the Small Business Administration is hosting a conference in Washington, D.C.  This week I will be bringing you some of the highlights of that conference, including tips from speakers and small business award winners.  I also have been told that SBA Director Karen Gordon Mills will release details of the new SBA loan program, America’s Recovery Capital this week.  The program will provide qualified small businesses with up to $35,000 of emergency loan money.  I will let you know when I get the details, later this week.

Why the attention on small businesses?  Well, the National Small Business Week conference is held every year, but this year in particular it is important.  Small businesses, “the economic backbone of our economy” (Scott McClellan – 1968) need help getting back on track.

So why are small businesses so important?  From the Small Business Administration, here are the facts.  Small businesses:

• Represent 99.7 percent of all employer firms.
• Employ half of all private sector employees.
• Pay 45 percent of total U.S. private payroll.
• Have generated 60 to 80 percent of net new jobs annually over the last decade.
• Create more than 50 percent of nonfarm private gross domestic product (GDP).
• Supplied more than 23 percent of the total value of federal prime contracts in FY 2004.
• Produce 13 to 14 times more patents per employee than large patenting firms. These patents are twice as likely as large firm patents to be among the one percent most cited.
• Are employers of 41 percent of high tech workers (such as scientists, engineers, and computer workers).
• Are 53 percent home-based and 3 percent franchises.
• Made up 97 percent of all identified exporters and produced 26 percent of the known export value in FY 2002

“If you look back over the last 20 years, the Fortune 500 companies in this country have created zero net new jobs. But at the same time, smaller businesses have created tens of millions of jobs. So if we care about growing our economy, as I believe we must, we really need to look at the challenges facing small business.”   (Senator Evan Bayh, Indiana )

Encouraging and supporting small businesses like yours is the job of everyone.  When Calvin Coolidge said, “the business of America is business,” I believe he meant small businesses.

Happy Small Business Week!

Image: newscom