It’s been nearly 6 years since the end of what’s been termed “The Great Recession” by economists and the US economy is still widely unrecovered with 7 million fewer jobs than before its start in 2007. Earlier today, economists forecasted a 65% chance that the US could slide into another major recession in 2015. With this news of doom and gloom many people feel powerless and wonder what they can do to help make a difference.
One answer is to start, support and buy from local small businesses. Traditionally, small businesses have been an engine driving the American economy.
Forbes contributor, Elaine Pofeldt says, “Government statistics show that small businesses make up 99.7% of all employer firms and created 65% of net new jobs for the past 17 years. While most of us picture a Main Street shop or restaurant when we hear ‘small business’ in reality the entrepreneurial world is very broad, extending from boutique architecture practices to manufacturing plants.”
Another way to help small businesses grow (which in turn helps support the economy) is to invest in small businesses, encourage invention and innovation and offer encouragement to those who are willing to step out and become entrepreneurs.
Multi-millionaire investment “Shark,” Lori Greiner has invested in dozens of businesses through the hit television small business investment show, Shark Tank. This week she described Scrub Daddy, a company that produces a special type of sponge, as Shark Tank’s largest success story. Scrub Daddy has sold more than $50 million in products since gaining the support of their investment “shark” on the show three years ago during season 4. Scrub Daddy now employs more than 30 employees and opened a new headquarters in Folcroft, Pennsylvania last year.
Another shark, ‘Shark Tank’ Investor Robert Herjavec says you have to know when to stay with your job and when to quit and become an entrepreneur full-time. “You’ve got to step off the ledge at one point,” Herjavec says. ‘It’s your company. You want to get to $50 million? You gotta do it.” Herjavec said his own decision happened in 1990. He chose to commit to his first business, BRAK Systems when he was unexpectedly fired from his job at LogiQuest and needed to make his mortgage payment.
Jim Clifton, Chairman and CEO of Gallup warns that, “It is catastrophic to be dead wrong on the biggest issue of the last 50 years — the issue of where jobs come from. Our leadership keeps thinking that the answer to economic growth and ultimately job creation is more innovation, and we continue to invest billions in it. But an innovation is worthless until an entrepreneur creates a business model for it and turns that innovative idea in something customers will buy. Yet current thinking tells us we’re on the right track and don’t need different strategies, so we continue marching down the path of national decline, believing innovation will save us. I don’t want to sound like a doomsayer, but when small and medium-sized businesses are dying faster than they’re being born, so is free enterprise. And when free enterprise dies, America dies with it.”
Lily Faden adds, “The pervasive idea of the ‘American Dream’ starts to lose its meaning when keeping a business competitive in this country is nearly impossible. If the economy requires that you outsource services or production to other countries because it’s cheaper, or if big banks won’t loan to small businesses, small businesses can’t function and the very American idea of the ‘self-made man’ starts to become more of an idea than a reality. Supporting small businesses encourages individuals to be entrepreneurial and to allow their own skills to serve the community. And once the small businesses operate efficiently and bring in good revenue, this builds the groundwork for an interconnected, thriving national economy.”
Saving the American economy can be driven by voting with your dollars.
- Pay attention to which companies you buy from. When you can, buy local.
- If you can get the same product and the same quality from a small company within your local area or within the US, make this your first choice over large corporate or foreign-based retailers.
- Pay the small businesses that you owe on time instead of running an account for 30, 60, 90 or 120 days. A big business won’t notice the delay, but a small business will appreciate the improved cash flow.
- Remember that when you purchase from a small business, those dollars are more likely to stay in your community, your city and your state. They will filter down into other local businesses, helping everyone in the community weather the financial storms that are predicted.
Entrepreneurship and innovation are still viable paths to achieve “the American dream,” it is important to pay attention to where we spend our money and how we support the small businesses that provide the majority of American jobs to make sure that the legacy will be alive and well for the next generation.