When you think of what drives the economy, big multinational companies are probably what come to mind. Truth be told, it’s actually some of the smallest businesses that are making the biggest impact. Small businesses account for 99.7% of all independent enterprise in the country and over the past 17 years they’ve been responsible for creating at least 65% of new jobs. What’s more, according to the U.S. Small Business Administration, 9 out of every 10 companies in the United States are actually microbusinesses that employ less than ten people. What does that mean for the impact of microbusinesses on the economy? Put it this way, if one in three microbusinesses hired just one new employee today, the U.S. would be at full employment tomorrow.
Small businesses account for over half the private sector jobs in the United States, and hold more than 13 times as many patents as larger businesses. What’s more, small businesses have a disproportionate impact on their local economies. Because of their limited size and scope, smaller businesses are more likely to keep money local than larger companies are. Not only do small businesses put money into the economy in the form of payroll to their employees, they are also more likely to be locally owned and to buy supplies and contract services locally. It’s what’s known as a “multiplier effect,” and studies have found that money spent at locally owned businesses returns more than three times as much money per dollar spent to the local economy as purchases made from national chains.
Last year, microbusinesses contributed almost $1 trillion to the nationwide economy. While the impact of one new company with only 10 jobs to the KC economy may seem like one small drop in a very big bucket, remember that all the water in that bucket is made up of equally small drops, and without them, the bucket would be empty.
As the 27th largest metropolitan area in the country, the Kansas City economy represents a microcosm of the national economy, and what is true of small businesses on a nationwide scale is also true of them here in KC… small businesses and entrepreneurs are at the heart of the Kansas City economic landscape.
Entrepreneurship has always been a proven way for people to find employment and improve their economic standing. In fact, no government program has ever helped as many people rise above the poverty level as small business ownership has. The median net worth for a non-business owner in the United States is around $85,000 while for a business owner; it is more than double that amount.
This is great news for the Kansas City metro, as we know we are a welcoming place for new entrepreneurs and small businesses. With the advent of Google Fiber and an abundance of start up resources, the Crossroads Arts District has rapidly become a hub for new local tech startups. Whether you’re creating a smartphone app, starting a cupcake bakery, forming a construction company, or even just running a consulting service out of your home, Kansas City offers a wide array of opportunities and advantages to the local small business.
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Reference Links:
American Independent Business Alliance
California Association of Independent Businesses
Association for Enterprise Opportunity
Association for Enterprise Opportunity – Missouri State Fact Sheet
Small Business Administration – Microbusiness
Forbes – Small Business Big Impact