We hear much about big business and its influence, for better or for worse, over governments and major global events, but did you know that small business contributes approximately one half of the Gross Domestic Product (GDP) of the United States each year? A total of about $8.5 trillion!
In all there are about 28 million small businesses currently operating in the US, which compares with around 18,500 large companies. For the purposes of this comparison a small business is as defined by the Small Business Administration, whose brief it is to set the criteria. In total some 120 million people across the country are employed by small businesses – roughly equivalent to twice the population of France! Of these 79% are individually operated, that is sole traders without any employees.
A Massive Contribution
These figures are well worth noting because an individual proprietorship is so often seen in terms of a solitary maverick reluctant to join the rat-race who is scratching a living and barely paying the bills. There are cases where this is accurate of course, but collectively small businesses make a massive contribution to the overall economy and as such their role should not be overlooked.
Hard Work and Discipline
It isn’t easy to run an individual enterprise, far less to employ people with the added responsibility that brings to pay wages at the end of the week as well as the bills. Usually budgets are restricted and an irregular income can make finance hard to come by. As well as coping with lean periods, there is an element of hard work and discipline involved in setting money aside during times of relative success and resisting the temptation to be reckless, and to either spend or over-invest. Around 50% of new businesses fail in the first year, so commitment to a long-term strategic plan is essential if the ambition is to be fulfilled.