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According to the NPCC, a small business in the United States is defined as a company of 500 or fewer employees, excluding non-incorporated sole proprietorships. Different size standards according to industry apply for companies that wish to be considered as government contractors. Small businesses tend to be localized; however, this is not always the case, nor is it a necessity according to the criteria set by the SBA. In 2007, small businesses represented 99.9 percent of the 27.2 million businesses in the United States, according to NPCC research. The NPCC will provide many avenues of assistance to every small business that it can because of the critical role that they play in the success of our local communities. Here are eight areas the NPCC sees as strong reasons to assist and work hard to see that each small business not only survives but thrives in our communities.
According to the SBA, small businesses employ approximately half of all private sector workers in the United States. Small businesses also employ 40 percent of high-tech workers and create more than half of nonfarm private gross domestic product (GDP). Since the mid 1990s, between 60 and 80 percent of all new jobs were created by small businesses. The SBA reported that in 2005 alone, small businesses created 979,102 net new jobs (almost 79 percent) versus 262,326 net new jobs created by large firms.
Small businesses, primarily start-ups, tend to increase in number during a recession, as many workers who have lost their jobs turn their backs on the job market or give up in their attempt to seek a position in another company. This is especially true for business owners and minority entrepreneurs, women, mid-career workers and people with disabilities. Workers from these groups traditionally find it more difficult to navigate the job market, especially during tough economic times, leading them to strike out on their own in entrepreneurial ventures.
According to the SBA, small businesses garner 13 times more patents per employee than large firms. Moreover, the patents from small businesses are twice as likely as those from large firms to be among the one percent most cited. Small businesses tend to have fewer layers of bureaucracy, which often allows them to be more responsive to market forces and able to take advantage of innovations in technology.
The number of small businesses tends to increase during tough economic times. According to the SBA, during the recession period between 1990 and 1992, 1,068,124 small businesses closed their doors. However, 1,085,737 new businesses were created during the same period, resulting in a net gain of 17,613 businesses. While more businesses ceased operations than were launched in the recession year of 2001, the trend was reversed in subsequent years despite the lingering weak economy. From 2002 to 2003, there was a net gain of 54,498 small businesses.
5. Economic Growth
Small businesses contribute to local economies by bringing growth and innovation to the community in which the business is established. Small businesses also help stimulate economic growth by providing employment opportunities to people who may not be employable by larger corporations. Small businesses tend to attract talent who invent new products or implement new solutions for existing ideas. Larger businesses also often benefit from small businesses within the same local community, as many large corporations depend on small businesses for the completion of various business functions through outsourcing.
6. Adaptability to Changing Climates
Many small businesses also possess the ability to respond and adapt quickly to changing economic climates. This is due to the fact that small businesses are often very customer-oriented. Many local customers will remain loyal to their favorite small businesses in the midst of an economic crisis. This loyalty means that small businesses are often able to stay afloat during tough times, which can further strengthen local economies. Small businesses also accumulate less revenue than larger corporations, meaning they may have less to lose in times of economic crisis.
7. Schools and Local Government Offices
When consumers patronize local small businesses, they are essentially giving money back to their local community. A thriving local business will generate high levels of revenue, which means that the business will pay higher taxes, including local taxes. This money is then used for local police and fire departments as well as schools.
8. Future Growth
Small businesses do not always stay small. Large corporations, such as Nike and Ben and Jerry’s, started off as small businesses that grew to become major players in the national and international marketplace. Many computer-industry leaders began as “tinkerers,” working on hand-assembled machines out of their garages. Microsoft is a prime example of how a small business idea can change the world. Small businesses that grow into large businesses often remain in the community in which the business was first established. Having a large corporation headquartered in a community can further help provide employment and stimulate the local economy.
Join your area NPCC. It can be a smart move for your home or small business. Because businesses that become a part of the NPCC promote each other and work together, your own business can grow and prosper quickly. Here are just a few ways you can benefit by joining your local NPCC:
If you make it known that your product or service makes great client or employee gifts, you could wind up with a very nice flow of business from your fellow NPCC members.
You may be able to line up some lunchtime sales or parties featuring your products at local businesses to help employees with gift shopping (especially at Christmas, Valentine’s Day and Mother’s Day).
You may qualify for less-expensive health insurance and business insurance available to NPCC members through our many co-op programs.
You can find out about local events where you might set up a booth and promote your business.
You’ll meet good, reliable sources for products and services like accounting, printing, computer support, etc.
You’ll be referred to other NPCC’s contacts.
You have a good chance of meeting local retailers who may be interested in carrying your products.
You’ll have an opportunity to do joint ventures with other local businesses, such as cooperative advertising or trunk shows.
Your business name can be associated with improving your community, since the NPCC generally work on civic improvement, legislation favoring local businesses, and economic development.
You may have access to mentors who can help you develop your business; or you may be able to serve as a mentor to someone else.
These are just a few of the many ways your area NPCC can give you access to a valuable networking and marketing system. You can find your local NPCC in the business listings of your phone book or online here at our official website.
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