In Praise of Small Business

As you may know, it is small business week, an event that deservedly celebrates all things small business and which has occurred every year in our nation’s capitol since 1963. The funny thing is, this is the time when those other folks in D.C. (you know who they are) also love to extol the virtues of small business.

A small sampling:

  • President Obama: “As of today, I am elevating the Small Business Administration to a cabinet-level agency… [We are] going to make sure that small-business owners have their own seat at the table in our Cabinet meetings.”
  • Mitt Romney: “If I become president of the United States, I am going to be a pro small business president and fight for the rights of small business people."
  • House Majority Leader Eric Cantor: “It is National Small Business Week, which is a good reminder that we need to be doing everything we can to help small businesses.”
  • George Bush: “I understand small business growth. I was one.”

Why is it that every four years politicians just love to extol the virtues of small business? Is it because small business is, as they say, “the backbone of the American economy”? Yes. Consider these small business statistics:

  • There are almost 30 million businesses in the United States, and of those, 99% are small businesses.
  • More than 50% of all employees work for small business.
  • A majority of new jobs also come from the small business sector. Indeed, according to a recent SBA report, small businesses outperformed big businesses in job creation by 75% from 1992 through 2010.

It is equally true that when the American economy hums along, the ones doing most of the humming are small businesses. Historically, recovery from recession comes from all different parts of the American economy, but often leading the way are small businesses who innovate, grow, hire, and buy.

If you think about the last big boom in this country, you will indeed notice that was the case. It was back at the turn of the century when the entrepreneur really came to the forefront of people’s consciousness. Innovative business people, often with little more than a great idea and a garage to work in (like Jeff Bezos) started e-businesses, tech companies, and all sorts of other businesses, fueling the boom.

And so it will likely be so this time as well. The trend both nationally and internationally is towards small business. New markets in China, India, South America, and online mean that more people than ever around the globe are joining the ranks of small business, and more markets than ever are becoming available to American entrepreneurs.

Calvin Coolidge once famously said that the “chief business of the American people is business.” Things are different now. It is the era of small business. The chief business of the American people now is small business.

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