"They" say that small businesses are the backbone of our society. At one point, this was certainly true. Alas, in 2024 I would submit that it's certainly nothing as structurally necessary as a backbone. Surely then, certainly it's a leg upon which half of the country stands, bearing at least as much weight as the corporate world? Let's look at some facts, and then we can decide for ourselves. A common statistic that is trotted out is that the vast majority of businesses in the US are small businesses. While technically this is true, let’s take a deeper dive.
Small business employs 61.6 million people, about 46% of the entire US workforce, in a total of 33.3 million businesses in this country.
However, 82% of those business have zero employees.
So that leaves only 11.1 million people actually employed by a small business. These workers make up only 7% of the US workforce.
Statistically these are the folks working at businesses that employ between 1-499 people.
And of those size businesses, the vast majority employ between 1 and 19 people.
Said a different way, only one out of 14 people in the United States can say they are employed by a small business.
Let’s address for a moment those 40.6 million small businesses that have one single entrepreneur helming the ship-of-one. There is absolutely nothing wrong with being a self-employed contractor delivering food or shrimping or gigging on Flivver making posters or guitar tracks. But generally when one thinks of a typical small business—one that this country was founded upon, one generally doesn’t picture one’s neighbor who sells needlepoint on Etsy. Most people picture the town hardware store, or the shiny diner next to it, or the filling station next to it, or the farmer who probably visits all of those businesses at least twice a week.
Now, before I get a bunch of angry, needle-wielding craftspeople banging at my door, let me be perfectly clear: I have nothing but respect. You’re putting yourself out there as a self-employed talent, whatever that talent might be. It takes bravery. It takes chutzpah. Basically, you’re giving up the guarantee of a steady paycheck, medical insurance, 401k, and water-cooler gossip for a slice of the American dream. You’re confident in your abilities, and you’re not going to answer to The Man anymore. For that you should be commended! Hell, you should be paid handsomely. It’s both ballsy and admirable.
I’m merely saying that small businesses with employees are taking one more scary step. They are not only providing a living for themselves, but they’re doing everything they can to continue to provide a living for the people who help make their small business a success. James Brown might have been the hardest working man in show business, but your local small-business owner is the hardest working woman in ANY business.
I honestly have nothing against large corporations. They are doing what capitalism allows—they “do business”. And they do it well, buying up the smaller companies little by little and turning them into leaner, more efficient machines. It’s what they do. Some of them contribute greatly to society, giving vast sums of money to charities and projects that improve the lives of many. What we are witnessing is Capitalism as it is today, which, if you ask me, I’ll tell you it’s not its finest hour, but as an ardent Capitalist myself, that’s a story for another blog.
Here’s the thing though…we—you, me—live in a free market. We, the consumer, can take our hard-earned money and spend it wherever we like! Here’s a challenge for you: Open your accounting or banking app and see if you can determine what percentage of your spending goes to small business—businesses that have checking accounts in the same town as you! You and everyone like you have more collective power than you realize. If you’re like most people, only a tiny portion of your spending goes toward supporting small business.
For those of you who truly go out of the way to keep your money within the community, whether by avoiding the national restaurant chains, by buying your seafood from local fishermen, or taking your car to the local mechanic to get your tune-up, we thank you.
I just want honesty and transparency. When statements are made that “the backbone of any economy is small business,” I think it’s important for people to understand the reality. The reality is that businesses like Sunflower Market, Amore Restaurant, Roger’s Painting, Bee Ridge Florist, and the like--they make up a very small and still dwindling portion of our economy.
So, with 7% of our total workforce employed in traditional small business—those businesses with 1-499 employees, would you make the statement that small business is the backbone of our society? A leg? Ok…not that big. What about the heart? A body can’t survive without a heart though, and if this trend has shown anything, it’s that the country continues to thrive while its small business vanish.
Musings of Paul, the tallest of the Pauls