Why Small Businesses and Entrepreneurs Are the Heart of America’s Economy and Spirit
While we often think of major corporations when it comes to driving innovation and competition in the United States, small businesses also play a vital role in our nation’s economy and boosts the overall spirit for our small communities. These locally owned and operated businesses scattered throughout main streets in our hometowns make up two-thirds of new jobs in the country.
Even though the overall share has gone down in recent years, small businesses still make up around 44 percent of all economic activity in the U.S. That is an impressive number when compared to the number of major corporations and brands located in big cities all over the country.
Why Are Small Businesses So Important to Our Economy?
It is estimated that within the last 20 years, small businesses throughout the country have been responsible for creating as many as 64% of all new jobs in the United States. Without the drive and dedication that small businesses provide, millions of people would be unemployed, and our economy would suffer a terrible fate. While many would argue that the economy is currently in an unfortunate place, we can be assured that the situation would be much worse if it was not for the many small businesses in our land.
Here are just a few reasons why small businesses are necessary to our economy and our communities.
Small Businesses Are Essential for Economic Growth
Small businesses can bring innovation to their communities regardless of their industry. They are essential for economic growth because they are often more in tune with consumers and the general public than giant corporations. For instance, they are more aware of products and services needed by residents in their area. With fewer hierarchy levels to move through, small businesses and those who run them tend to be more willing to give new and inventive ideas a try. All of this willingness to be more innovative can be a massive benefit to the community the business serves and plays a significant role in economic growth for the area.
Small Businesses Employ More Local Workers
One significant way in which small businesses contribute to the economy of local communities is by employing local workers. While they help bring more innovation and growth to the area, they also stimulate the economy by providing more job opportunities to those who may not necessarily be employable by giant corporations. They also create new jobs in small towns and rural areas far away from the more prominent industrial parts of town. That can make it much easier for those who want to work but have limited transportation options.
Small Businesses Can Adapt to the Changing Climates
Small businesses and those who run them can adapt quickly to the ever-changing economic climate. That is thanks in part to the fact that small businesses are highly customer-oriented, and their owners have a better grasp on the needs of the communities they serve. Most local customers will remain loyal to their local small businesses, even amid an economic crisis. This type of loyalty means these businesses are more capable of staying relevant even with less revenue than many giant corporations with fewer loyal customers.
Small Businesses Help Local Governments Thrive
Anytime consumers patronize small businesses within their community, they are not only helping out that specific business, but they are also giving money back to their local government. A local business that is thriving will generate exceptional revenue. As a result, the business will pay out higher taxes, including their local property tax. That money is then used for all the community’s local needs, such as paying for schools, road maintenance, and the local fire or police department. A successful small business can even help improve the property values within a community, which can greatly benefit everyone who lives in the area.
The impact a small business can have on a local economy’s growth can also be helpful in sales tax collection. It can help fund special projects like lighting for sidewalks or renovation costs for historic buildings that the community may not have otherwise been able to afford. All local businesses must change a sales tax based on the area they are located in. That is often the backbone of special taxation districts whenever a company is wildly successful.
A Successful Small Business Does Not Have to Stay Small
A small business does not have to remain small, especially if an innovative idea helps the brand grow. More giant corporations that once started as small businesses, such as Nike, later became leaders in their industries. Whenever a small business grows into a much larger and more successful corporation, it will usually stay in the community where the company was initially established, or have its main headquarters there. That can help propel a community further and create an abundance of new jobs to attract more people to the area. It can stimulate the local economy by creating a favorable market to develop even more successful small business ventures.
Small Businesses Are Highly Adaptable
Since small businesses are so connected to the communities they serve, they are usually more adaptable to their local economic climate changes and challenges. As the demands of their customers start to shift, these businesses often find themselves located on the front lines, making the necessary adjustments to ensure their customers remain happy in a way that more giant corporations could never do. As a result, customer loyalty for smaller businesses is often much more vital. In times of economic turmoil such as the current pandemic, many consumers will make the extra effort to show support to these small businesses to ensure they stay afloat during hard times instead of getting their goods and services through a giant corporation.
The Three Main Ways a Small Business Contributes to the Local Economy
Small businesses can sometimes be overlooked when it comes to economic news, as more focus tends to be on the state of larger corporations. While they may not generate the same level of revenue, they are still a vital part of our economy and should not be overshadowed by the more prominent brands.
There are three main ways that small businesses contribute to the economy. They provide us with the opportunity to gain financial independence, encourage innovation and creativity within industries, and help create more employment opportunities, especially in rural regions.
It is vital that all small business owners pay attention to their worth and never forget how much they can impact their local communities and the world overall. All small business owners need to realize how they play a significant role in keeping the American Dream alive.
To get through the difficult stages and make your way toward success, a small business owner must focus on their money and time management and be sure to hire the right people for the job. Marketing is also a key component of success when competing with larger corporations.
It is an excellent opportunity for one to pursue their dreams, but there are challenges that we all must face along the way; and many times, people will start to lose hope when times get tough.
It is essential not to lose hope, even if you have very few followers. There have been many instances where small businesses are born from ideas that seemed too outrageous to catch on to. But if it were not for those impossible dreams and the willingness of those one-time small business owners, we would not have many of the major companies we are so familiar with today. Brands such as HP, Google, Amazon, and even Disney were all innovative ideas backed by strong-willed entrepreneurs who refused to give up. Because they would not take no for an answer, we now have many of the products that we cannot seem to live without.
Are You Ready to Start Your Own Business? Contact the National Association for the Self-Employed Today
It can be very easy to underestimate how important a small business is when you only look at its statistics. But by taking a step back and looking at the bigger picture, you can get a better idea of what the company can offer the community right now and in the future. Boosting the economy, adding jobs, and bringing products or services needed in a small town or rural area are just a few ways that small businesses can impact our economy and the world we live in.
If you are ready to play an essential role in our nation’s economy and start your own business, contact the experts at NASE. Our team is available to help up and coming entrepreneurs run a better business. We are available to answer questions you may have and can assist you with getting your small business started in the right direction. Contact us today.
Shining Self-Employment
Hillary Schubach is the Founder/President of Shine Consulting LLC located in Santa Monica, California. Through Shine, Hillary has two businesses, Shine/ MBA Admissions Consulting and Shine/ Marketing Consulting.
As a boutique MBA admissions consultancy, Shine serves top business school candidates around the world. They work extremely closely with their clients, guiding them through every step of the admissions process, helping them to gain acceptance to the schools of their choice. They also advise applicants on a wide range of masters and PhD programs across disciplines including law, medicine and public policy.
As a boutique marketing consultancy based in Santa Monica, California, Shine provides strategic marketing services that benefit businesses large and small, across all industries. Some of those services include Branding and Brand Management, Marketing Strategy, Naming and Market Research.
When and why did you join the NASE?
I discovered NASE and subscribed to its newsletter back in the late 2000s when I first launched my business. I was actively seeking resources to ensure that I understood the legal and financial/tax implications of launching a business, set it up using the right corporate structure, hired and paid people with the appropriate classifications, secured the necessary licenses, trade names, insurance policies…looking back, it all must have been so daunting — none of this was in my wheelhouse! Yet somehow I figured it out piece by piece — and I found NASE to be a valuable source of intel. I’ve been receiving their content in my inbox for many, many years. Yet it was only recently that I realized the benefits of membership and officially joined the organization. So I’m in a “long-time listener, first-time caller” category, but very grateful to be here. Since becoming a member, I’ve already reassessed my health insurance offerings, gained access to tech support, lowered my shipping costs, and felt more well informed on relevant policy issues.
What inspired you to enter the field you are in?
I’ve been a marketer at heart since my earliest contemplations of a career. My mother was once a NYC magazine editor, so I’ve always had “a way with words;” by age nine, I had written my first novel and planned to become the next Judy Blume. After two very quick and early publisher rejection letters, I realized helping others to tell their stories might be a better fit.
In college this evolved into an embrace of marketing, and as a Duke mega-fan, I surprised no one by joining the exploding subsector of sports marketing. There I spent five years happily marketing the brands of world-class athletes and sports teams across the college, pro and Olympic realms.
That was until several of my college friends began pursuing their MBAs. While I’d never considered it before, I saw the caliber of schools they were attending and realized that if I’d had a shot at that type of education, it was an opportunity I shouldn’t pass up.
As I made my way through Harvard Business School, and my subsequent career in brand management (i.e. consumer packaged goods or “CPG’’ marketing), I found myself volunteering to help friend upon friend with their MBA applications, as we do. And at some point I realized I was pretty darn good at it. Finally my storytelling skills had found a place within my marketing career. Because at its core, developing an application is a marketing expertise — beginning with deep introspection into your brand, what it stands for, and how it’s differentiated.
Over the years, as life took me from NYC to Colorado, branching out into consulting was the best way to expand my pool of potential work. I launched Shine with the intention of “seeing how it goes” by splitting my time 50/50 between 2 practice areas: marketing consulting (brand manager and strategist on demand!) and MBA admissions consulting. (I also launched a dog training/exercise business on the side, but that’s another story…) And for the first several years, I split my time healthily between the two. Yet as the years went by, I saw that the demand for a “niche specialist” in MBA admissions consulting (with the stamp of approval from a top school) not only enabled us to sign clients with little effort but also command a higher rate. As such, I found myself spending less time completing lengthy marketing RFPs, competing against a cluttered market of fellow CPG rock stars, and more time traveling to give presentations on admissions topics, attend conferences, and build a strong peer group of fellow consultants who’ve gone from being competitors to collaborators and friends.
So, that’s how I came to find myself in this line of work (after all, no one goes to business school to become a business school admissions consultant).
To come full circle: what drew me initially to marketing was the excitement of not only digging into what a brand stands for, and who it resonates with, but also how it’s differentiated. (And then, in CPG, having the opportunity to run an entire business around that brand was immensely cool and challenging.)
What keeps me here, and specifically focused on the work I do today, is the opportunity to help others achieve their goals. As a marketer, I absolutely love providing a thoughtful perspective that enables businesses to redefine their status quo and flourish. And marketing humans to achieve their goals for graduate school inspires me every single day. The young professionals I’ve worked with teach me about all that’s good in the world. They are driven to make a positive impact, lift others up, and reinvent what’s possible. Best of all, they teach me about unfamiliar sectors, life and culture in opposite corners of the world, and soak in my advice like a sponge. I’m very lucky to see what lies ahead for us on this earth. Over the past few years especially, it’s kept me optimistic that our future is in good hands.
When and why did you start your business?
My first official client was an author in November of 2007 and I formally registered the business as Shine Consulting LLC in January 2008. As for the why portion of this question, that is answered above.
How do you market your business?
Great question. Ironically, I’m letting some of my own marketing advisors down. I KNOW that what I should be doing involves a great deal more LinkedIn posting/interacting, self-promotion, and video content creation. I KNOW I should be reaching out to my hundreds of past clients and persuading them to repost their testimonials (which live happily on our website) to prominent industry media outlets. I’m just not a big social media consumer, and the more I post for the sake of posting, the less “on brand” it feels.
My beau is a professional photographer and he’s actually a master of tasteful self-promotion through social media and email marketing. So he’s been pushing me to make sure the world knows when I’ve achieved something noteworthy — whether being quoted in an impressive media outlet or volunteering in a meaningful way (e.g. writing a personal branding curriculum for a refugee empowerment program).
I’ve also received some invaluable guidance/ideas by attending some truly excellent speaker events — fortunately it is so easy to do in today’s virtual world. My two alma maters have been a great source of programming on that front, as have seemingly random invites through my network — often chock full of juicy nuggets!
Fortunately, what I’ve done extremely well is nurture relationships, which has inspired my clients and industry colleagues to refer business to me. I’ve also maintained a great professional website that reflects our brand well, and is optimized in all the important ways. People genuinely do find us through online searches, and feel good about what they see. And I’m also an active speaker on the topic of MBA admissions, which puts me right in front of my target audience. I’ve tried a few different things along the way (e.g. event sponsorships, Facebook/Twitter pages) but the above 3 strategies have felt the most authentic for me. And I have a hunch that’s why they’ve been so successful for me.
What challenges have you faced in your business? How have you overcome them?
Attempting to evolve my business model has been a challenge. I’ve strongly considered (many times) the possibility of hiring more consultants, which I know would enable me to scale, take on more clients, and increase my earnings. I’ve also spent many months going down the path of formalizing a partnership with a colleague, only to find that it simply wasn’t meant to be.
In both cases I’m very proud of the diligence I’ve done to explore those options to the fullest. I’ve engaged career coaches, business consultants, tax advisors, and legal advisors to assess the implications… I set up informational sessions with experts and mentors to understand processes and best practices. Ultimately, I’m certain that I’ve ended up where I was meant to be. No matter how often I reassessed and experimented, the universe always brought me back to right where I am. This was recently validated by a career coaching exercise, which revealed that I was naturally well-suited for the model we have (leading a boutique firm as the primary expert, and delivering a high quality highly personalized experience) rather than building/managing a large organization at the expense of those core values.
Do you have any employees? If yes, how many and are they full or part time?
I’m the only W2 full-time employee, but I’ve hired 61 p/t contractors over the years… some to build out client-facing marketing teams, others to support me in my own work, others to take outsourced responsibilities off my plate, and some to provide specialized skills I simply don’t have (e.g. tax accounting, graphic design). I’m proud to have several teammates who’ve now worked with me for years on end, and who I truly consider trusted partners, both behind the scenes and out front.
What’s your schedule like, what’s a typical day for you?
On my best day ever, I’m ideally up around 5:30am getting ready for a 6/6:30am workout. I’m a big runner and find my best shot at squeezing in some exercise is before I pick up my phone to check email. Once I see what the day has in store, I’m immediately derailed.
After that comes the best part of the day, around 7:30/8am — getting coffee and walking my dog Emma around our Santa Monica neighborhood. Dogs rule the roost in our little stretch of town, and my hilarious dog/neighbor interactions are truly the highlight of most mornings.
I am to be at my desk 9:30am-5pm at a minimum, so clients/colleagues know they can generally get hold of me during “normal business hours.” Though of course, our work often extends VERY late into the night, especially when it’s deadline season. I don’t mind working long hours during the week if that means I can have my weekends for personal time. I’m great at “turning it off” outside of work hours, so having those 2 weekend days to decompress is the best way for me to come back Monday with a fresh/recharged brain.
As for the typical day, I’m split between burying my head in client work and taking calls/zooms to either strategize/plan/brainstorm with a client, discuss feedback I’ve sent them on their work, prepare them for an upcoming milestone or consult with a prospective new client. I am to set work blocks vs. call blocks on my calendar to maximize productivity, I do have to be flexible on timing as our clients are in time zones all around the world (in the past few weeks, I’m talking Dubai, Cape Town, Santiago, Montserrat, Darwin Aus., it’s been extraordinary!!).
And then of course, somewhere in there needs to be responding to emails, industry readings, completing overdue ad hoc projects (like this NASE piece), making an important website update, closing out a client account now that we’ve met their goals (hooray!), getting those missing receipts to my bookkeeper, checking in on pitches and a few clients who’ve gone dark, reviewing last month’s financials and setting my biz dev goals for the next month. It is really hard to take care of everything yourself. I am grateful for the ability to outsource some of this to my assistant and bookkeeper, but most does admittedly still fall on my shoulders. While also doing all of the client work. And marketing.
What’s the best thing about being self-employed?
Without a doubt, it’s the ability to set my own schedule and work from anywhere. I take extensive vacation time in the spring (when school deadlines are long over) and typically go somewhere far away around the world for 2-3 weeks at a time.
And even during the thick of our busiest work periods, I’ve been able to tackle essays from a café in Mexico, the mountains of Colorado, and while spending the holidays with family on the east coast. There is absolutely nothing like the freedom of not having to ask permission for where and when you plug in each day.
One other huge perk, which I really appreciate: is being able to focus on just doing great work. In my corporate jobs, the quality of work was certainly very important — but so were the internal politics. (Arguably more important). So for me, stripping out that aspect and just focusing on what we aim to do every day for our clients has been invigorating. I’m a very down-to-earth person, so this has been an ideal culture for me. I’ve definitely thrived as a business owner.
What’s the best compliment you’ve ever received from a client?
That I’ve changed their life and helped them to set/achieve goals they never thought possible.
Whenever they say they “couldn’t have done it without me” I correct them. I’m just helping them to shine. They’re the “product.” They were pure potential before they even met me. But it does feel immensely gratifying to show them what they’re capable of, convince them to set their goals higher, and help them build a path to get there. That admittedly is what I set out to do, and it is incredibly inspiring.
What’s the most important piece of advice you would give to someone starting their own business?
Build a support network and community. You are not alone! Join your industry organizations. Attend those “coffee mornings” type meetups. In most industries, there truly is plenty of pie to go around. Even your “competitors” can become your biggest sources of insight, advice, and support. And if all goes well, they can become your friends, collaborators, perhaps even your future partners. I’ve met the nicest people through some of those random groups, and we’re still in touch many years later. (That’s the beauty of LinkedIn). Being a small business owner, or even a solo practitioner, does not mean you need to figure everything out on your own.
Which NASE member benefit is most important to you?
I’m still very new at this member experience, but at this moment, I’m excited about the varying discounts and “group” benefits I see — and am hoping to find that we’ll get access to some “corporate sized” perks through our membership en masse.
Health insurance is one of my major pain points, so I was glad to connect and learn about some new options. I also signed up right away for the UPS shipping discount program (shipping has also become a huge pain point for me… I can’t believe how expensive it’s gotten).
So again I’m just scratching the surface of what benefits are available, but if nothing else, I like being part of a community of small business owners and having the opportunity to access resources, experts, tools, and information that will benefit me as needs arise.
Any other information you would like to share?
I suppose I’ll close by welcoming any of our members to contact me if I can support them in managing their brands, growing their businesses, or accelerating their careers through higher education.
Congress Fails to Pass Additional COVID Relief Funds
In May, Congress failed to advance, Small Business COVID Relief Act. Democrats had attempted to additional Covid funds to the emergency Ukraine aid. The bulk of the package, $40 billion, would backfill the Restaurant Revitalization Fund for the roughly two-thirds of applicants who didn’t receive any grant money under the initial program.
The remaining $8 billion in the Cardin-Wicker bill would be divided among select industries:
• $2 billion to gyms and fitness centers.
• $2 billion for live event services, such as companies that provide staging, lighting, sound and casts for theaters.
• $2 billion for transportation service providers, such as buses and ferries.
• $1.4 billion for very small businesses located within 50 miles of land ports of entry that were closed due to the pandemic, with at least one-third set aside for firms located near the Mexican border and another one-third for businesses close to the Canadian border.
• $500 million for minor league sports teams.
• $85 million for small businesses in Alaska, Washington and Minnesota that are geographically separated from the rest of the U.S. and weren’t accessible due to pandemic-related Canadian border closures.
The act largely failed due to concerns by Republicans on the need for funds and the growing federal deficit.
It is unclear if Congress will take further action in support of small businesses still financially recovering from the Covid pandemic disaster.