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Why Small Businesses Matter


Author Michael Ellsberg recently wrote a fascinating piece for the New York Times. He started by revealing he was typing his article on an Apple Computer, using Microsoft software. Once finished, he would share his story with the world via Twitter and Facebook.

The problem, revealed Ellsberg, was that the founders of every one of those high tech companies was a college dropout.

It was a compelling opening, and a masterful way to make his point — that higher education is failing America. Specifically that it’s failing to produce, or even encourage, job creators. Ellsberg’s premise is that our great universities have lost the interest, and/or ability, to generate the kind of people that made America the economic powerhouse of the world.

When you think about it, that’s not so surprising.

Who among us learned anything truly valuable – or interesting — about capitalism, stocks & bonds, or even personal finance — in a classroom? Why does the education system of the greatest capitalist nation do such a poor job of explaining what capitalism is, and how it works?

But the academic world isn’t the true problem.

Higher education can only reflect what a society values. And for far too long, we haven’t valued the foot soldiers who really make this country tick — the risk takers who come up with an idea, and lay everything on the line – personal property, personal savings, years of their lives — to make it happen. To start what all of those high tech companies were in their infancy: small businesses.

That’s why I’m so encouraged by the new national movement promoting “Small Business Saturday.”

Devised last year by American Express, Small Business Saturday is designed to be an annual celebration of the businesses that drive the American economy, businesses that provide over half of American jobs– not Hewlett-Packard, or Wal-Mart, or IBM, but the small businesses employing 500 or fewer people, the mom-and-pop corner stores, the newly conceived start-ups.

For the whole of this Saturday, American Express customers who register on Facebook, then spend $25.00 or more at a small business and will receive a $25 refund from Amex.

It’s a great promotion, and a nice attempt to encourage people to spend at small businesses, but the $25.00 refund isn’t the only reason to shop at a small business.

When people look at the mega-corporations and conglomerates that rule the market, they seem to forget a very important truth:  virtually every business out there, no matter how large it is, had to start somewhere. Microsoft was dreamed up by a couple of Harvard drop-outs. Apple started in Jobs’ parent’s garage. Google started as a Stanford research project. The list goes on.

Every start-up’s got a chance of hitting it big, after all. But a small business doesn’t need to become big businesses in order to matter. Despite all of the high profile IPOs and internet giants dominating the headlines these days, small businesses are equally critical to the economy. But the health of the small business ecosystem can be a lot harder to gauge than companies trading on the Dow Jones. Maybe for that reason, it’s so easy to forget about them.

Thankfully, American Express and their much-appreciated faux-holiday aren’t the only ones trying to remind the American public.

The U.S. Small Business Administration recently sent out a message to young, unemployed people across the nation: stop looking for a job, and make one. Start your own business. Sure, it’s easy to get lost in the maddening scramble to find a “real job.” But, the SBA’s eager to remind us- capitalism is about a lot more than nine-to-fives and blind consumerism. It’s about making your own opportunities. And the SBA is putting its money where its mouth is.

According to the Washington Post, the SBA Deputy Adminstrator Marie Johns is touring the country with something known as the Young Entrepreneur Series, attempting to shed some light on the many resources available for entrepreneurs- and bolster those who are uncertain of their future with a few rousing success stories.

“There is such a lack of awareness of the resources that are out there among young people,” Johns told the Post, “we need to grow the economy and create more jobs in the country. We need everyone who may have a dream or an idea to go out and do it.”

Of course, starting a small business isn’t for everyone.

“Unemployed people tend not to start as successful companies on average as people who are employed do,” said Scott Shane. Scott, a professor of entrepreneurship at Case Western Reserve University, is among the many experts who believe that, while the SBA’s heart is in the right place, its message might not be entirely helpful to the 16% of unemployed men and women under the age of 24- which is, currently, its target demographic.

“You’re not going to get as many successful business with young unemployed people as if you put your money into encouraging entrepreneurship among employed, middle-aged people- one of the greatest assets a business owner can bring to a fledgling company is an existing consumer base, as well as industry knowledge…what’s more, the self-employed are especially likely to report that they find their work stressful.”

Johns, while she acknowledges the viewpoint of Shane and others like him, also feels that entrepreneurship is still a worthy path, and pointed to the large range of resources the SBA provides hopeful entrepreneurs- including a free training program, access to microloans, and counselling for young men and women.

“The company they start may last for a season. It may be their life’s work, it may lead to other things. Either way, it’s well worth the effort.”

Johns acknowledged that “being a small business owner is not an easy road — it takes drive and determination.”

She encouraged young entrepreneurs to look into the SBA’s resources if they’re considering small-business ownership as a career path. Among other things, the SBA provides a free entrepreneurship programaccess to microloans and counseling for young people.

The SBA will be travelling to Tahlequah, Oklahoma on November 29, and Milwaukee, Wisconsin on December 1.

Whether you go out and spend a little extra cash at a small business today or not, today is as good an opportunity as any for a little reflection. It’s easy to get embittered about our society. It’s easy to feel helpless as a small business owner or as an average citizen. Sometimes it seems that all the power is in the hands of the monopolies or the corporate lobbyists.  But there’s a reason that Small Business Saturday comes right after Thanksgiving. Just as Facebook, Microsoft, Twitter and Apple were all founded by dropouts, so too was America. We are a country built on the premise and the promise of personal freedom- the freedom to realize your own goals, the freedom to pursue your own vision of success and happiness. Millions of American entrepreneurs and small business owners are doing just that. Not all of them will weather the storm or find their fortunes. But they deserve our nation’s collective recognition and respect. And not just one day a year.

Robert Smith, Nicholas Greene, and Benjamin Christopher were all contributors to this piece.

Robert Smith is the co-founder and co-host of Why Didn’t I Think of That? Bob is a voice talent and communications professional who’s held leadership positions in corporate marketing, advertising and broadcasting. 

Nicholas Greene is a freelance writer based out of Calgary in Alberta, Canada. Nick has been writing since he was old enough to pick up a pen and has contributed to numerous tech blogs over the course of his career. 

Benjamin Christopher is Chief Blogger and Executive Editor for Thinkofthat.net. Benjamin lives in Los Angeles, California, where he is actively involved with several young start-ups. 

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