There is no sector of the U.S. Economy that is more vital, yet often ignored' than small business sector. While many thought that big business drove the U. S. Economy by virtue of employment and the ability to produce products at lower prices, that is not necessarily the case. While we are currently appalled and angry at the excess of some of the biggest businesses, the fraud and destruction of many employees' life savings and the large number of cutbacks in employment of these companies, the small business sector continues to make its mighty contribution to our economy. A better measure is that out of almost 5 million corporations in the U.S. there are less than a million corporations with annual revenues of more than a million dollars. More than 80% of all corporations can be considered small business. They employ 51% of all public sector workers and represent nearly all of the self-employed, which makes up about 7% of the civilian workforce. In the face of the wide layoffs caused by the current market disruptions, the small business sector still provides about 75% of the net new jobs.
The small business sector also makes a large contribution to federal government activities, capturing about one third of all prime and subcontract dollars.
In Texas the story is much the same. There are almost 400,000 employer businesses and over 98% have fewer than 500 employees. Small business employment represented 47.6% of the states total employment according to the U. S. Department of Commerce. In 2000, the non-farmers proprietors' share of small business income totaled $68.1 billion and increase of 7.2% over 1999, a remarkable performance indeed.
In June of 1998, the office of Advocacy for the Small Business Administration issued a report entitled; "The New American Evolution -The Role and Impact of Small Firms." In it they state that in addition to statistics on income and employment, the small business sector contributes mightily in two major ways.
"They are sources of constant experimentation and innovation, they are an integral part of the renewal process that defines market economics" and secondly "by creating opportunities for women, minorities and immigrants, they are an essential mechanism by which millions enter the economic and social mainstream."
Nowhere is this more evident than in the Houston Metropolitan area.
All of you, sole proprietors, home based business owners, LLC's and sub-S corporations, retailers, wholesalers, manufactures, importers and exporters, professionals, tradesmen and all others engaged in small business; this is your opportunity, during this period of business malaise, to stand tall with full appreciation for the tremendous contribution you are making to your country, the economy and your employees as well as yourselves.
Never has the small business sector been more important and each of you should take pride in your contribution.
?Ed McMahon?s career includes both the small business and the corporate world. He graduated from Villanova Univ., has an MBA from the City University of New York and has completed postgraduate work at the Stanford University Graduate School of Business. He is the author of thebook?UnderstandingSmallBusiness (http://www.Understandingsmallbusiness.com)
Ed has extensive small business experience as an owner, investor and counselor.. He has dealt with many small retailers, distributors and manufacturers and has counseled several hundred small business prospects in the principles of small business.
He drafted the FTC disclosure statement for a major convenience store chain currently operating in the Northeast U.S.
He has held senior posts as executive vice president of a mid-size oil company, headed up the polymer division of a major chemical company and was employed as an officer of a major consulting company.
Ed has taught Industrial Marketing at the graduate level, and the business college level, and taught ?UNDERSTANDING SMALL BUSINESS? workshops for the past 11
