Small business is the true engine of our economy

Published 9:00 pm Friday, December 5, 2008

Even since early colonial life in America, small business has formed a critical thread in the fabric of our nation’s economy. As a young budding nation, our country depended on the local store owners, the blacksmiths, the small farmers, and the full-time brick making and carpentry artisans of early American landscape. Today, more than 200 years later, this thread has not unraveled. Since that time, small business has remained a constant in our nation’s economy even in the midst of the changing times we saw in the industrial revolution, World Wars I and II, the technology boom, and today in the wake of a floundering Wall Street. Fundamentally, the real engine of our economy is not located in New York, or Washington, but collectively in the towns, cities, and main streets across America, just as it has been for centuries.

That is why I have said that any solution to our nation’s economy needs to address the economic circumstances of our families and small businesses first. According to the Small Business Administration (SBA), small businesses:

Employ almost half of all private sector employees;

Pay nearly 45 percent of total U.S. private payroll;

Have generated 60 to 80 percent of net new jobs annually over the last decade;

Hire 40 percent of high tech workers (such as scientists, engineers, and computer workers);

Are 52 percent home-based; and

Made up 97.3 percent of all identified exporters and produced 28.9 percent of the known export value in FY 2006.

Our small business leaders provide new ideas, employ a vast number of workers, and develop innovative products and services. By investing in their businesses, the small firm owner makes a major contribution to the local, regional, and national economy. Moreover, small businesses make vital contributions to their communities by supporting the local tax base, sponsoring youth sports teams and participating in community-based charities and school fundraisers.

If the government wants to get our economy back on track, we need to turn towards the centerpiece of our nation’s economy. We need to start by ensuring capital flow to small businesses, putting more money back in families’ budgets through tax cuts so they can invest in small businesses, allowing small businesses to band together to purchase and provide health insurance for their employees and addressing energy costs that are taking a toll on small business owners. These long-term solutions, many of which have been introduced in Congress and I have supported, touch the very heart of Main Street America and will be the solutions that rebuild our economy.

Nevertheless, times of economic uncertainty can be scary for small businesses. Small businesses often don’t have the resources larger corporations have that enable them to quickly adjust to every trend and issue. Even seasoned business owners may find themselves in uncharted territory as they wade through the current economic situation. If you are a small business owner and find yourself in a situation where you need help, the following online resources may be helpful to you.

The Small Business Administration Web site,, provides tools and resources for small businesses at many levels. Small business owners will find information on loans available through the Loan Guaranty program, information on tax benefits and a host of resources related to the current economic situation. The site also offers information on obtaining government contracts. As any small business owner knows, the economic challenges that each business faces can vary from state to state. As such, the SBA provides smaller district offices to provide information based on your specific state or region.

The SCORE Association (Service Corps of Retired Executives) is a resource partner of the SBA dedicated to entrepreneur education and the formation, growth and success of small businesses nationwide. SCORE mentors are volunteers and are available to assist business owners with counseling and training on a number of business issues, including how to market in a weak economy, how to trim fuel costs, and how to face the next economic cycle with confidence. Visiting the SCORE Web site,, will help you to find a mentor near you.

We have a lot of work to do to get our economy back on track, but we will get there sooner if we place our focus on creating long-term solutions that provide help to the small businesses of main street America — the true engine of our economy.