It’s Small Business Week in America, time for the country to recognize the many contributions small businesses make to our economy, our communities and our fellow Americans.
Now, if you own a small business — especially if you work from home or have just a handful of employees — acquaintances might not give you much respect.
When I started my business, my friends and family didn’t think I had a “real” business. They’d ask me to run errands, meet in the middle of a work day, or ask when I was going to start looking for a job. It wasn’t until one of my clients hired me for a project in Australia (that wowed them) that it dawned on them I might actually be doing something others valued.
So the next time you’re at a cocktail party or family gathering and asked when you’re going to get a “real” job, wow your friends and family with these small business facts.
Most small businesses survive. No doubt you’ve been told most small businesses fail. Well, check this out: Nearly 80% of businesses started in 2014 were still in business the following year, the U.S. Small Business Administration reports — the highest survival rate since 2005. About half of all businesses are still in business five years later, and many of those that closed were because the owner decided to do something else, not because of bankruptcy. A third of all establishments will still be up and running 10 years later.
Small businesses with one to nine employees have an even higher survival rate.Of all small businesses, 3.7 million have between one and nine employees. A whopping 62% of these are over five years old, meaning they have an even greater chance of survival than larger small businesses.
Apple, Whole Foods, Starbucks, Coors, Mattel all started out as small businesses. Many new businesses start with venture capital enabling them to grow quickly, and some businessmen inherit money and start out big. But most small businesses start from scratch and grow over time. Remind your friends of the humble origins of many of the companies now on the Fortune 500 list.
You have a better chance of being in the Fortune 500 than the ones there now. Talking about that list of the biggest companies in America, small businesses are going to push most of them off the list. Nine out of every 10 companies in the Fortune 500 in 1955 weren’t there in 2015, 60 years later. Over time, small upstarts replace stalwarts of our economy.
Small businesses create most of the jobs.According to the Small Business Administration (SBA), small businesses create 64% of new private sector jobs in the U.S. We hear constantly about the importance of jobs from politicians. Small businesses actually go out there and create them.
Small businesses are big innovators. When comparing companies than create a large number of patents (15 or more in four years), small businesses create patents at a rate 16 times higher than larger businesses.
Small business is a path toward the American Dream. With greater economic disparity and the loss of many good paying blue collar jobs, today, more than ever, small business ownership is a path toward a middle-class lifestyle. That helps explain the relatively high rates of small business ownership by minorities (29.3% of small businesses), immigrants (14.4%), and women (36.3%). Veterans also make up a large number of small business owners at 9.3%. When other paths are blocked to making money, small business ownership and self-employment is a way forward.
Being in business is cool. Successful entrepreneurs are this generation’s role models. Where once corporate executives were the business media darlings, today, they are people like Mark Zuckerberg and Sheryl Sandberg of Facebook; Elon Musk of Tesla, Jack Ma of Alibaba and the late Steve Jobs of Apple. Entrepreneurs are inspiring.
Small businesses change the world. They innovate, creating new industries and new products. They provide vital services. They support their communities. Most importantly, they create jobs. When you create a good job with fair pay and good working conditions where people take pride in their work and are treated with respect, you change their world, your world and the world in general.
Rhonda Abrams is the author of 19 books on small business. Connect with Rhonda at www.PlanningShop.com.