For the past year, I have been reflecting on my experience as a business owner while deciding what I want to do next. I knew I didn't want to return to a standard corporate job, and I was drawn to the idea of giving back to the community. I explored some non-profit job opportunities, but nothing seemed like the right fit. Then I recalled a conversation with a long-time colleague right after announcing that we were selling the business.
I told her about our decision to sell the business and expressed my interest in giving back to the community rather than working for another company. She said something that stuck with me – "just because you owned a small business, don't think you weren't giving back to your community."
As the months passed, I repeatedly came back to that conversation. Then one morning, as I was finishing up some work on our company's financials, I ran a report on the company's performance for the entire fifteen years we were owners. And that's when what she had said hit me – the report showed that over those fifteen years, we had contributed more than $11,000,000 in payroll to the local economy.
Our small business mattered -- and here on this financial report were eleven million reasons why.
Each of those dollars helped feed someone, house someone, provide transportation for someone and, in at least one case, pay for someone's child to attend college. That money helped other small businesses in the community hire employees of their own. Even the dollars spent at the outlets of larger national companies helped sustain employment in our community. And that doesn't take into account the federal, state, and local tax dollars generated by those payroll dollars and used to fund various government functions.
Admittedly, eleven million dollars is not Amazon or Apple's kind of money, but it's not insignificant. As I thought about it further and did some research on small businesses, I came to understand, in a way that I had only thought of vaguely, those small businesses are the cornerstones of our local communities and the backbone of the U.S. economy. The statistics below tell part of the story:
99.9% of the businesses in the U.S. are small businesses (500 or fewer employees) *
30.7M small businesses exist in the U.S. today, including 8M minority-owned businesses*
47.5% of private-sector employees work for small businesses*
59M people work for small businesses, and 40M people work for businesses with less than 100 employees*
Between 2005 and 2019, small businesses accounted for 64% of total jobs created**
62% of businesses in the U.S. have five or fewer employees***
More than 1.9M new jobs are generated annually by small businesses**
As impressive as these numbers are, they don't tell the whole story of why small businesses are so crucial to the local communities in which they operate. First, as I pointed out earlier, small businesses generate dollars for the local economy and federal, state, and local government entities.
Second, small businesses employ local people -- some of whom would struggle to find quality employment without the opportunity small companies provide. At any one time, our company employed between 12 and 40 people. Our employees ranged from people with advanced degrees to people who had not graduated from high school. Regardless of their educational or socioeconomic status, they all received healthcare coverage and the opportunity to participate in a 401K program.
Many small businesses also provide employees with specialized training and educational opportunities, benefiting the company, the employee, and the broader economy. These people can be productive members of the local community because of the chance small businesses provide.
Third, small businesses contribute to the well-being and cohesion of the local community. Like many others, our small business donated time, money, and in-kind goods to local organizations, schools, and charities. Without the involvement and contributions of small businesses, these organizations would not accomplish the vital work they do for local communities.
The examples above are just three of many reasons small businesses are critical to our local communities and the larger economy -- these range from their role in fostering competitive markets to driving business innovation at the local level.
Being a small business owner was the most difficult and the most fulfilling job I've ever had. With the benefit of a year to reflect on my experience as a business owner, I can say that I am incredibly proud of our business's contributions to the lives of our employees and the local community.
The past year has taken a significant toll on many small businesses. To those of you small business owners who continue to persevere in the face of these incredible challenges, be proud of the critical role you are playing in your local community, the national economy, and our society at large. Without your ingenuity, grit, and determination, your community would have a less diverse and vibrant economy, fewer people employed, and less effective community organizations.
If there is anything I can do to help your small business, please reach out to me at stuart@workwiseadvisors.com or 850-284-7609.
Sources
*Small Business Administration -- United States Small Business Profiles for 2018
** Congressional Research Service
***Small Business Administration
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