A well-known foreboding statistic is that 75 percent of businesses fail in the first two years; and it’s not as if you’re in the clear after that. In almost every tactical aspect, small businesses are at a disadvantage – health insurance, financial and employment resources, brand leverage, taxation, and the list goes on. These facts contribute to (if not explain) the above figure.
But while that statistic might paint the picture that small businesses are fragile or volatile, the recession and most recent economic crisis has been revealing otherwise.
Even more than usual, article links about small businesses have been flying around our office. One article from CNN illustrated the hits that small business have been taking, but aren’t anywhere close to throwing in the towel. Here are some of the business owners’ comments:
“It’s one of the reasons we’re so driven here. This is my hometown. I’ve got three kids and a wife to look after. I’ll put in as many hours as I need. We’re going to make it work.”
“We’ve been squeezing through, and like a lot of business owners, I’m the first one who doesn’t get paid if there isn’t enough money.”
Sure, the big players have a seemingly endless money reserve and can just shut down a branch or two when times get tough, but it’s really our nation’s small businesses that have the scrap, the agility, and the passion to see it through. And that’s not just anecdotal.
Soon after I was passed this CNN article, I received a link to a blog post about the recent ADP National Employment Report for September of ’08. The figures show that during hard times (this past six months) the large companies are cutting jobs left and right, while small businesses (less than 50 employees) keep expanding and producing jobs.
September 2008 Job Growth:
All Other Businesses: -36,000
Past Six Months Job Growth (Apr-Sept):
Small Businesses: +148,000
All Other Businesses: -244,000
So what’s to conclude? Where some might consider it risky to work for a start-up, I’m thinking that having my own feet planted in a small business is the most opportune place to grow.