The Rigors of Running A Business from Large to Small
One of the smartest ways an economy reeling from a recession can improve is to have small businesses lead the way. By rebuilding Main Street and providing small businesses with a landscape to grow and hire employees, the economy can and will improve. During the 2001 economic crisis following the 9/11 attacks, small businesses lost fewer jobs and recovered much faster than large corporations. In fact, from 1993 to 2009, small businesses accounted for 9.8 million of the 15 million net newly created private sector jobs. That’s nearly two out of every three of the period’s net new jobs,” according to the Small Business Association Office of Advocacy.
It’s proven that small businesses are the most direct paths to middle-class security. By investing in small businesses, you’re investing in job growth. Today small businesses play a central role in employment, but they are ignored because, well, they’re small. Between 25 and 27 million new generation businesses account for 60- to 80-percent of all jobs in the United States. These are businesses that are small- to medium-sized and range from the technology to the service industry.
Look at WebMD Health Corp. — a website that offers medical information to those that access it. It started small, but has recently crossed a sales mark of $480 million in 2011. Medifast, Inc. is a diet program that helps people lose weight more effectively than traditional diets. It’s one of America’s best 100 small companies, pulling in $218 million in sales for 2011.Can small businesses compete against the big box stores? Absolutely — and the economic effects will be far greater.
In Rochester, N.Y., Henrietta’s 5LINK’s parking lot is jam-packed. When the business essentials and technology store got off the ground, it had a mere 34 employees. Today it has grown to more than 270 employees who all live in the local area.Down the road from 5LINK is an empty Eastman Kodak Co. building, along with an empty Zerox Corp. and Bausch + Lomb Inc. building. It’s a stark contrast.
From 1999 to 2009, the number of small businesses have increased while the number of larger businesses dropped. In the county that 5LINK operates in, businesses with 100 or fewer employees grew by 324 in the past decade, while businesses with more than 100 shrank by 75. “The importance of small and mid-sized business in Rochester is huge,” Mark Zupan, dean of the Simon Graduate School of Business at the University of Rochester, told the Democrat & Chronicle. “Small businesses play a very consistent role in job creation.”
And small business owners want to keep growing their businesses, but they run into issues along the way. The number one concern is access to capital to grow their business. Big banks are approving about 10 percent of small business loans today — a less than stellar number. Small banks — the ones that are typically found in local communities — approve nearly 50 percent of small business loan applicants. Communities realize the importance of small business and the impacts it can have on a local economy.