Pushing To Business Success

Is there really any such thing as small business? The term conjures up a wide range of imagery.

The U.S. Small Business Administration (SBA) defines both a sole proprietorship and a firm with 499 employees—and everything in between as being a small business. An individual selling quilts at a monthly flea market would seemingly have little in common with a 400-person software design firm.


Obviously, lumping all small businesses like these together is ridiculous. In some ways, the SBA has admitted as much, in that its own definitions for what constitutes a small business run for 29 pages.

So here are the facts. You may think you don't need to know this to grow your business, but I encourage you to stay with me.

The U.S. Census Bureau 2002 report showed that there were 22 million small businesses operating in the United States. However, look at the numbers a little more closely, and you'll quickly see that approximately 17 million of these businesses don't have any employees. Some are simply shells set up by accountants and attorneys for tax purposes. Others are enterprises that can't or don't want to get any larger than they already are.

Despite not having any employees, you are probably a small business if:

* You sell candles, cleaning products, or cosmetics on a very part-time basis and make a few hundred dollars in profit per year
* You lost your job in a corporation but got hired by the same company as an independent contractor
* You are 70 years old and retired, but you do a little consulting on the side
* You have a booth at local art festivals to sell your handmade crafts
* You buy things and "flip" them for a profit: cars, rental houses, collectibles, and so on
* You live off the income from your investment activity

There's nothing wrong with these enterprises. They make money for somebody, so the IRS rightfully considers them more than a hobby. Some of them even give people a pretty luxurious lifestyle.

But these "small businesses" seldom lead to more employees being hired, and very few of them grow beyond a one-person entity. In many cases, the person conducting the work doesn't want the business to grow.

The intention is to make a living or earn a little extra spending money. Other non-employing firms are truly small businesses interested in growth.

The following are examples of the non-employing firms interested in growth versus the comparatively static types previously listed:

* You've worked in the same industry for a number of years, and you've recently decided to forge out on your own to build the proverbial "better mousetrap."
* You are a skilled craftsperson who hasn't needed another person yet but hopes to reach that point someday soon.
* You've been in business for quite a number of years as a sole practitioner but are now giving serious consideration to expansion.
* You've been in business only a short time but have always had a goal of growing your customer/client base.
* After years of hitting singles as a one-person business, a customer approaches you with a home-run opportunity that you can't fulfill by yourself.

For the purposes of this book, I assume that a business interested in growth either is or plans to be an employing firm. Are there examples of one-person firms that achieve growth through outsourcing and "virtual teams"?

Absolutely! Technology is making this easier and easier every day. But at this point, these companies are in the distinct minority. This article targets those who want to grow their business. Throughout, I assume that you already have a small business probably with employees or that you're intending to get to that point sooner rather than later.

Most of the observations I make are aimed at helping you grow a business that probably has at least a handful of employees but hasn't gotten so big that it has taken on a corporate life of its own.

It's in the size range of roughly 5 to 99 employees that a lot of the important growth milestones take place in a company's development.

However, these numbers are rather arbitrary and are used primarily because the government divides up segments of data at these points. If your business is smaller than five employees—but you're trying to grow—you'll also find just as many good insights and ideas that will help you get to the next level.

Understand, however, that it is the fast-growing companies that really create job growth. The Ewing Marion Kauffman Foundation, which promotes entrepreneurship in America, notes: "New fast-growth companies comprise around 350,000 firms out of a total of six million U.S. businesses with employees. Yet, this small base of companies created two-thirds of net new jobs in the 1990s."